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Cblm prepare trial balance on Bookkeeping NC III

Logistics (Vaal University of Technology)

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HOW TO USE THIS

COMPETENCY- BASED LEARNING MATERIAL (CBLM)

Welcome to the competency-based learning material for the module:

Preparing Financial Reports. This module contains training materials and
activities for you to accomplish.
The unit of competency, "Prepare Financial Reports", contains the
knowledge, skills and attitudes required for a TVET trainer to possess.
You are required to go through a series of learning activities in order to
complete each learning outcomes of the module. In each learning outcome, there
are instructional sheets (Information Sheets, Self-Checks, Operation Sheets and
Task/Job Sheets) for further reading to help you better understands the
required activities. Follow the activities at your own pace and answer the self-
check at the end of each learning outcome. If you have questions, please feel free
to ask for assistance of your trainer/facilitator.
This module was prepared to help you achieve the required competency:
Prepare Trial Balance. This will be the source of information for you to acquire the
knowledge and skills in this particular module with minimum supervision or help
from your trainer. With the aid of this material, you will acquire the competency
independently and at your own pace.
Remember to:
Work through all the information and complete the activities in each section.
Do what is asked in the INSTRUCTIONAL SHEET (TASK SHEET, JOB
SHEET) and complete the SELF-CHECK.Suggested references are included to
supplement the materials provided in this module.
Most probably, your trainer will also be your supervisor or manager. He is
there to support you and show you the correct way to do things. Ask for help.
You will be given plenty of opportunities to ask questions and practice on the
job. Make sure you practice your new skills during regular work shifts. This way, you
will improve your speed, memory and your confidence.
Use the Self-Check questions at the end of each section to test your own
progress.
When you feel confident that you have had sufficient practice, ask your
Trainer to evaluate you. The result of your assessment/evaluation will be
recorded in ACHIEVEMENT CHART AND PROGRESS CHART.
You need to be competent in this module before you can move to the next
competency. A CERTIFICATE OF ACHIEVEMENT will be awarded to you after
passing the Institutional Competency Evaluation.

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BOOKKEEPING NC III
List of Core Competencies

No. Unit of Competency Module Title Code

1 Journalize Transactions Journalizing Transactions HCS412301

2 Post Transactions Posting Transactions HCS412302

3 Prepare Trial Balance Preparing Trial Balance HCS412303

4 Prepare Financial Reports Preparing Financial HCS41230

Reports 4

5 Review Internal Control System Reviewing Internal Control HCS412305

System

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UNIT OF COMPETENCY: PREPARE FINANCIAL REPORTS

MODULE TITLE : PREPARING FINANCIAL REPORTS

INTRODUCTION :
Financial statements are reports that summarize important financial accounting
information about your business. There are three main types of financial statements:
the balance sheet, income statement, and cash flow statement.

It is the transfer of the ledger accounts’ open balances to another

accounting form in order to check the accuracy of the debit and credit totals.

NOMINAL DURATION : 16 HOURS

SUMMARY OF LEARNING OUTCOMES:

At the end of this module, you must be able to: LO1.
List account titles
LO2. Transfer balances from the ledger LO3.
Summarize trial balance

SUMMARY ASSESSMENT CRITERIA:

1. Asset, liability, equity, revenue and expenses titles are listed in
accordance with the Chart of Account.

2. Asset, liability, equity, revenue and expenses are transferred in

accordance with Chart of Accounts

3. Debits and credits are totaled with 100% accuracy.

4. Trial balances are extracted with 100% accuracy.

PRE-REQUISITE: JOURNALIZE TRANSACTIONS& POST TRANSACTIONS

Learning Outcome 1 -LIST ACCOUNT TITLES

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Contents:
1. Chart of Accounts

Assessment Criteria:
1. Asset, liability, equity, revenue and expenses titles are listed in
accordance with the Chart of Account.

Contents:
 Listing of Account titles for all types of business organization and
activities.

Conditions:

Trainees must be provided with the following:

Equipment:

 LCD Projector
 Laptop

Supplies and materials:

 Ledger
 Pencil
 Pencil Eraser
 Ruler

Tools:

 Stapler
 Calculator

Methodologies:

 Group discussion

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 Interaction
 Lecture
 Practical exercises

Assessment Methods:

 Written test
 Practical/performance test

LEARNING EXPERIENCES

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Learning Outcome  List Account Titles

1

Learning Activities Special

Instructions
1.List Account Titles
from the Ledger Read Information Sheet 1.1-1
Answer Self-check 1.1-1
Compare your answers with the answer key 1.1-1
2. Classify account titles Perform procedure on Task sheet 1.1-1
according to assets,
liabilities, equity,
revenue and expenses.

3. Assign account code

of each account title.

4. Transfer balances
from the ledger.

5.Summarize Trial
Balance

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INFORMATION SHEET 1.1-1

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Learning Outcome 1 - LIST ACCOUNT TITLES

LEARNING OBJECTIVES:

After reading this Information Sheet, the trainee must be able to:

1. List account titles from the ledger.

2. Classify account titles according to assets, liabilities, equity, revenue
and expenses.

LIST OF ACCOUNT TITLES FROM THE LEDGER

Ledger of Krystal Enterprises shows the following:

ACCOUNT TITLE CASH

ACCOUNT CODE 101

page 1
DATE REMARKS REF PARTICULARS DEBIT CREDIT BALANCE

1-Dec GJ 1 Initial Capital 300,000.00 300,000.00

3-Dec GJ 1 Collection of A/R 80,000.00 380,000.00

10- GJ 1 Drawings 10,000.00 370,000.00

Dec

15- GJ I Payment of A/P 50,000.00 320,000.00

Dec

31- GJ I Paymnt of Salaries 5,000.00 315,000.00

Dec Exp

ACCOUNT TITLE: ACCOUNTS RECEIVABLES

ACCOUNT CODE 102

DATE REMARKS REF PARTICULARS DEBIT CREDIT BALANCE

Date Developed: Document No.

Bookkeeping NC III
May 29, 2013
Prepared by:
Prepare Trial Issued by:
Page 7 of 17
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Balance MARINA C
TESDA - PERIA
PPSAT

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3- GJ 1 Collection of A/R 80,000.00 80,000.00

Dec

5- GJ 1 Sales on Account 110,000.00 30,000.00

Dec

ACCOUNT TITLE SERVICE VEHICLE

ACCOUNT CODE 110

DATE REMARKS REF PARTICULARS DEBIT CREDIT BALANCE

25-
Dec GJ I Acquisition of 125,000.00 125,000.00
Svehicle

ACCOUNT TITLE ACCOUNTS PAYABLE

ACCOUNT CODE 210

DATE REMARKS REF PARTICULARS DEBIT CREDIT BALANCE

15-
Dec GJ 1 Payment of accounts 50,000.00 50,000.00
25-
Dec GJ 1 Purchase of vehicle 125,000.00 75,000.00

ACCOUNT TITLE KRYSTAL Enterprises,

Capital
ACCOUNT CODE 310

DATE REMARKS REF PARTICULARS DEBIT CREDIT BALANCE

1- GJ 1 Initial Capital 300,000.00 300,000.00

Dec

ACCOUNT TITLE KRYSTAL, Drawing

ACCOUNT CODE 311

DATE REMARKS RE PARTICULARS DEBIT CREDIT BALANCE

F

10- GJ I Personal withdrawal 10,000.00 10,000.00

Dec

ACCOUNT TITLE ENTERPRISE REVENUE

ACCOUNT CODE 410

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DATE REMARKS REF PARTICULARS DEBIT CREDIT BALANCE

Date Developed: Document No.

Bookkeeping NC III
May 29, 2013
Prepared by:
Prepare Trial Issued by:
TESDA - Balance Page 8 of 17
MARINA C
PPSAT PERIA

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5-Dec GJ 1 Payment of accounts 110,000.00 110,000.00

ACCOUNT TITLE SALARIES EXPENSE

ACCOUNT CODE 501

DATE REMARKS REF PARTICULARS DEBIT CREDIT BALANCE

31- GJ 1 Payment of salaries 5,000.00 5,000.00

Dec

Below is the list of all account titles based from Krystal Enterprises ledger:

Account Title:

Cash
Accounts Receivable
Service Vehicle
Accounts Payable
KRYSTAL, Capital
KRYSTAL, Drawings
Enterprise Revenue
Salaries Expense

LO 2 – TRANSFER BALANCES FROM THE LEDGER

After reading this Information Sheet, the trainee must be able to:

Date Developed: Document No.

Bookkeeping NC III

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May 29, 2013

Prepare Trial Prepared by:
Issued by:
TESDA - Balance Page 9 of 17
MARINA C
PPSAT PERIA

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.Transfer balances of assets, liabilities, equity, revenue and expenses in accordance

with Chart of Accounts.

Introduction:
Before a trial balance is made, each general ledger account with more than
one entry on either or both sides is footed. This means that the amounts on each
side of the account are totaled.

Footing is usually made if the ledger is a two-column ledger. However, if the

ledger were a three-column or a four – column ledger, footing would not be a
necessary because the ledger accounts have their respective running balances
already at the balance column of the ledger.

OPEN AND CLOSED ACCOUNTS

a. Open Account - is when the debit total and the credit total of an account
is not equal. There is a remaining balance. It is called
account balance. If debit total is greater than the credit total,
the account has debit balance. If the credit total is greater the debit
balance, the account has a credit balance.

b. Closed account - is when the debit total and the credit total of an
account are equal. There is azero ending balance.

RULES

1. Always start a trial balance with a heading Who, What and When.

2. Only ledger with open ending balances are included in the trial balance.

3. TOTALS of debit and credit are double ruled.

STEPS IN PREPARING THE TRIAL BALANCE

1. Write the heading at the top. The heading shows the name of the business on

Date Developed: Document No.

Bookkeeping NC III
May 29, 2013
Prepared by:
Prepare Trial Issued by:
TESDA - Balance Page 10 of 17
MARINA C
PPSAT PERIA

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thefirst line, trial balance on the second line and the date or month and year the
trial balance is being prepared on the third line.

2. The date of the trial balance must be the last date of the month.

3. Determine all open accounts in the ledger. Closed accounts are not
included. Write all open accounts under the account name title. If it has a
debit balance, write the amount under debit column. If it has a credit
balance, write the amount under credit column.

4. All debit and credit account titles in the trial balance are written with the same
margin from the left side of the page; meaning credit account titles should not be
indented.

5. Add each amount column and write the totals in small pencil figures in the
uppermost portion of space below the single ruling. If the two totals are equal, write
them in ink on the line.

6. Draw double lines under the totals of the debit and credit columns.

If the trial balance totals are not equal, the trial balance is said to be out-of-
balance. The maincauses of the errors are the following:

1. Posting of an item to the wrong side of the account

2. Erroneous copying when transferring a balance from the ledger accounts to

the trial balance.

3. Omission of the posting of either a debit or credit entry in the

journal

4. Posting the same account twice

5. Wrong addition or subtraction in determining the balance of anaccount.

KRYSTAL ENTERPRISES
TRIAL BALANCE
DECEMBER 31, 2010
Date Developed: Document No.
Bookkeeping NC III
May 29, 2013
Prepared by:
Prepare Trial Balance Issued by:
Page 11 of 17
TESDA - PPSAT
MARINA C PERIA

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ACCT CODE ACCOUNT TITLES DEBIT CREDIT

101 Cash P 315,000.00

102 Accounts Receivable 30,000.00
110 Service Vehicle 125,000.00

210 Accounts Payable P 75,000.00

310 KRYSTAL Enterprises, Capital 300,000.00
311 KRYSTAL, Drawings 10,000.00
410 Enterprise Revenue 110,000.00
501 Salaries Expense 5,000.00

LO 3 – SUMMARIZE TRIAL BALANCE

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After transferring balances from the ledger, Debit and Credit columns are
totaled. Total balance of Debit column should be equal to the total balance of Credit
column.

KRYSTAL ENTERPRISES
TRIAL BALANCE
DECEMBER 31, 2010

ACCT CODE ACCOUNT TITLES DEBIT CREDIT

101 Cash P 315,000.00
102 Accounts Receivable 30,000.00
110 Service Vehicle 125,000.00

210 Accounts Payable P 75,000.00

310 KRYSTAL Enterprises, Capital 300,000.00
311 KRYSTAL, Drawings 10,000.00
410 Enterprise Revenue 110,000.00
501 Salaries Expense 5,000.00

TOTAL P 485,000.00 P 485,000.00

HINTS FOR LOCATING ERRORS IN BALANCING TRIAL BALANCE

1. A DIFFERENCE OF p.01, .10, p1.00, p10, p100,ETC. SUGGESTS THAT AN

ERROR HAS BEEN MADE IN ADDITION, SUBTRACTION.

2. A DIFFERENCE OF p9 OR A MULTIPLE OF P9 INDICATES TRANSPOSITION,

MEANING THE ORDER OF FIGURES IS REVERSED. EX. P29 IS WRITTEN AS
P92.

3. A DIFFERENCE DIVISIBLE BY 2 INDICATES AN ERROR IN POSTING TO

THE WRONG COLUMN OF THE TRIAL BALANCE
4. A DIFFERENCE DIVISIBLE BY 9 OR 99 INDICATES A SLIDE OR
MISPLACEMENT OF DECIMAL POINT.
EX. P100 IS WRITTEN AS P10.
SELF-CHECK 1-1

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MULTIPLE CHOICE:
Instruction –Encircle the letter that corresponds to the best answer.
1. The difference of the totals of debit and credit accounts is called
a. Account balance b. debit balance c. credit balance
d. normal balance

2. PR stands for
a. Program registration c. pre reference
b. Post reference d. posting reference

3. A device used to test the equality of debits and credits

a. Trial Balance b. ledger c. journal d. calculator

4. The total of debit and credit account are equal

a. closed account c. account balance
b. open account d. out balance

5. List of all account titles used by an enterprise/agency

a. Income statement
b. Chart of account
c. Balance sheet
d. Subsidiary ledger

ANSWER KEY 1-1

1. A

2. D

3. A

4. A

5. B

TASK SHEET 1.1-1

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Title: PREPARE TRIAL BALANCE

Performance Objectives:Given the tools and materials you must post

transactions according to the procedures involved.

Supplies and Materials:

 Ledger form
 General Journal
 Pencil
 Eraser
 Ruler
 Bond Paper

Tools and Equipment:

 Calculator
 Pencil sharpener
 Stapler

Procedure:
1. List Account Titles.
2. Classify account titles according to assets, liabilities, capital, revenue
and expenses.
3. Transfer balances of accounts from the ledger in accordance with the
Chart of Accounts.
4. Summarize trial balance.
5. Debits and Credits are totaled with 100% accuracy.
6. Trial Balances are extracted 100% accuracy.

Assessment/Evaluation Method:

1. Lecture/Demonstration
2. Written Examination
3. Observation

PERFORMANCE CRITERIA CHECKLIST 1.1-1

Performance Yes No N/A

Standards

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1. List account Titles in accordance with Chart of

Accounts.

2. Transfer balances from the ledger in accordance

with Chart of Accounts

3. Summarize trial balance with 100% accuracy.

4. Extract Trial Balance with 100% accuracy

Remarks

Trainer

REFERENCES

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BOOKS

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Edwin G. Valencia, Gregorio F Roxas (2009-2010). Basic Accounting,

Concepts, Principles, Procedures and Applications 3 rd Edition.

Edwin G. Valencia, Gregorio F Roxas, Darrel Joe O Asuncion (2009-2010)

Partnership and Corporation Accounting, 3 rd Edition.

Conrado T. Valix & Jose F. Peralta (2004). Financial Accounting, Volume 1.

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