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Buad 803 Ahmad Jibrilindv. Assignment
Buad 803 Ahmad Jibrilindv. Assignment
QUESTION:1 Draw a trial balance of john ltd and post the following items;
Purchase 10,000
Capital 30,000
Land and Building 6,500
Machinery 4,200
Wages 300
Sales 8,000
Stock 4,000
Insurance 600
Drawings 2,000
Rentals Receivable 4,000
Rent 3,500
Bill Payable 2,100
Bill Receivable 1,400
Profit Brought Forward 1,500
Equipment 13,000
Cash 4,000
Bank 8,500
Creditors 10,000
Debtors 6,800
Carriage outward 300
Return inward 400
Return outward 300
Loan 5,000
Interest on loan 600
Bank overdraft 1,000
71,200 56,800
DEDUCTION: The fact that Total Credit does not equal to total debit in the trial balance above,
it means therefore that there is at least a mathematical error in the company’s ledgers.
debit and credit account column totals that are equal. A company prepares a trial balance
periodically, usually at the end of every reporting period. The general purpose of producing a
trial balance is to ensure the entries in a company's bookkeeping system are mathematically
correct.
Preparing a trial balance for a company serves to detect any mathematical errors that have
occurred in the double-entry accounting system. If the total debits equal the total credits, the
trial balance is considered to be balanced, and there should be no mathematical errors in the
ledgers. However, this does not mean there are no errors in a company's accounting system. For
example, transactions classified improperly or those simply missing from the system could still
be material accounting errors that would not be detected by the trial balance procedure.