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Drawing up a trial balance

Module by: Siyavula Uploaders. E-mail the author

ECONOMIC AND MANAGEMENT SCIENCES

Grade 9

BUSINESS, CONSUMER AND FINANCIAL KNOWLEDGE AND SKILLS

Module 23

DRAWING UP A TRIAL BALANCE

Section 3: Trial balance

ACTIVITY1:

To draw up a trial balance

[LO 3.3]

Once the ledger accounts have been completed, the accounts are closed and transferred to a Trial Balance.

Accounts that have entries only on the debit or credit side, are simply added up to obtain a total.

In the case of accounts that have entries on the debit as well as the credit side, the balance is calculated. This means a balance that is the difference between the two sides is calculated. For example:

Table 1
Bank Account
2003         2003        
Nov. 30 Total received CRJ 20 698 00 Nov. 30 Total payments CPJ 15 633 00
              30 Balance b/f 5 065 00
        20 698 00         20 698 00
Des. 1 Balance c/f 5 065 00            

The balances carried forward and the totals are transferred to the Trial Balance.

  • A Trial Balance is a list of balances and totals compiled to determine whether the debit side and credit side are equal and by so doing to check whether the double-entry principle was applied to every transaction.

Although the Trial Balance indicates that a credit entry was done for every debit entry, certain errors will not be shown up by the Trial Balance. Thererfore a Trial Balance that balances cannot always be accepted as proof of correctness.

  • Below is an example of a Trial Balance.

TRIAL BALANCE OF RANDOM STORES AS AT 30 JUNE 2003

Table 2
    Dt. Cr.
Balance sheet section      
Capital B1   199 322
Withdrawals B2 15 000  
Land and Buildings B3 105 000  
Vehicles B4 28 000  
Equipment B5 32 125  
Trading inventory B6 45 310  
Debtors control B7 12 180  
Bank B8 11 754  
Change B9 600  
Petty cash B10 250  
Creditors control B11   15 994
       
Nominal Account section      
Sales N1   350 000
Selling costs N2 250 000  
Rates and Taxes N3 4 210  
Insurance N4 3 850  
Water and Electricity N5 4 952  
Telephone N6 4 810  
Stationery N7 2 750  
Repairs N8 5 325  
Wages N9 18 000  
Salaries N10 26 000  
Rental income N11   4 800
Totals   570 116 570 116
       

ASSIGNMENT 1: Trial Balance

  • Use the completed ledger accounts of Enslin Dealers (Activity 3.6 Assignment 9).
  • Calculate the balances on the accounts, calculate totals and draw up a Trial Balance.

ASSIGNMENT 2: Auxiliary Journals, Ledger and Trial Balance

  • P. Hatting starts his own business, Hatting Dealers, on 1 April 2003 with a capital contribution of R105 000.

1. Record the transactions for April in the following auxiliary journals: CRJ 3.7.1, CPJ 3.7.1, DJ 3.7.1 and CJ 3.7.1

2. Close the journals at the end of the month

3. Transfer to the ledger accounts and indicate folio numbers

4. Calculate the balances, or totals where necessary

5. Draw up a trial balance at the end of April

  • Transactions: April 2003
  • Duplicates of receipts issued
Table 3
DATE TO WHOM ISSUED, FOR AMOUNT
2003    
April 1 P. Hatting, for capital contribution R105 000
7 V. Jansen, to pay his debt R 660
  Blommie Bloemiste, for rental income R 500
14 D. Coetzee, payment on account R 300
21 G. Ferreira, payment on account R 200
28 V. Jansen, to pay the amount of the invoice issued on 17 April R 246
  • Cash sales of goods as per cash-register roll
Table 4
DATE SALES SELLING COSTS
2003    
April 7 R5 800 R4 600
17 R3 820 R2 440
21 R7 620 R5 740
28 R1 944 R1 406
  • Cash received for services provided
Table 5
DATE AMOUNT
2003  
April 5 R2 160
17 R3 220
25 R1 736
  • Duplicates of bank deposit slips
Table 6
DATE AMOUNT
2003  
April 1 R105 000
5 R 2 160
7 R 6 960
14 R 300
17 R 7 040
21 R 7 820
25 R 1 736
28 R 2 190
  • Cheque counterfoils
Table 7
DATE PAYEE REASON FOR PAYMENT AMOUNT
2003      
April 2 Perfectum Builders Building purchased R80 000
3 Stylish Equipment Equipment purchased R 4 500
4 Cash For change R 180
  Caro Ltd. For materials purchased R 2 675
7 Cash For wages R 560
10 Trust Brokers For insurance premium R 600
14 Cash For wages R 560
  Zy Wholesalers Goods purchased for cash R 5 950
    Stationery purchased for cash R 180
16 Larnie Furnishers Paid amount owing R 3 760
17 Caro Ltd. Materials purchased R 2 896
  Cash For wages R 560
  Wesco Distributors For goods purchased R 3 875
28 Cash For wages R 560
30 J Henning Manager’s salary R 2 110
  Bengo Wholesalers Amount owing to date  
  • Original invoices received from providers
Table 8
DATE PURCHASED FROM ITEMS/SERVICES AMOUNT
2003      
April 3 Larnie Furnishers Equipment R 3 760
5 Bengo Wholesalers Goods R 8 844
6 Willow Suppliers Materials R 2 500
7 Pen and Paper Stationery R 228
9 Bengo Wholesalers Goods R 4 750
15 Toledo Motors Delivery vehicle R28 660
17 Willow Suppliers Materials R 420
    Goods R 3 000
19 Pen and Paper Stationery R 106
26 Bengo Wholesalers Trading stock R 1 400
  • Duplicates of invoices issued for goods sold on credit
Table 9
DATE SOLD TO AMOUNT COST PRICE
2003      
April 4 V Jansen R660 R495
10 D Coetzee R890 R712
13 G Ferreira R260 R128
16 D Coetzee R106 R 84
17 V Jansen R246 R184
26 G Ferreira R340 R272

DEBTORS JOURNAL OF HATTING DEALERS – APRIL 2003 DJ 3.7.1

Table 10
In-voice Day Debtors Fol. Sales Selling costs
           
           
           
           
           
           
           

CASH RECEIPTS JOURNAL OF HATTING DEALERS - APRIL 2003 CRJ 3.7.1

Table 11
Doc. Day Details Fol. Analysis Bank Sales Selling costs Current income Debtors Control
Sundries accounts
Amount Fol. Details
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       

CREDITORS JOURNAL OF HATTING DEALERS – APRIL 2003 CJ 3.7.1

Table 12
In-voice Day Creditors Creditors control Trading inventory Stationery Cost of materials  
Sundries accounts
Amount Fol. Details
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 

CASH PAYMENTS JOURNAL OF HATTING DEALERS - APRIL 2003 CPJ 3.7.1

Table 13
Doc. Day Name of beneficiary Fol. Bank Trading inventory Cost of materials Wages Creditors control
Sundries accounts
Amount Fol. Details
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   

Asessment

Table 14
Learning Outcomes(LOs)
 
LO 3
MANAGERIAL, Consumer and Financial Knowledge and SkillsThe learner will be able to demonstrate knowledge and the ability to apply responsibly a range of managerial, consumer and financial skills.
Assessment Standards(ASs)
 
We know this if the learner :
3.1 completes a basic income statement and balance sheet for a service and retail business;
3.2 investigates the public relations, social responsibility and environmental responsibility strategies and actions of different businesses and organisations;
3.3 completes cash and credit transactions in the books of service and retail businesses;
3.4 uses keyboard skills and function keys in developing, storing, retrieving and editing business documentation;
3.5 analyses financial statements for decision-making at a basic level;
3.6 differentiates between the forms of credit purchases.

Memorandum

ACTIVITY 1

ASSIGNMENT 1

TRIAL BALANCE OF ENSLIN DEALERS AS AT 30 NOVEMBER 2003

Table 15
    Dt. Cr.
Balance Sheet section      
Capital B1   30 000
Withdrawals B2 100  
Vehicles B3 7 800  
Equipment B4 4 640  
Trading inventory B5 2 710  
Debtors control B6 2 750  
Bank B7 21 345  
Creditors control B8   11 253
       
Nominal Accounts section      
Sales N1   6 500
Cost price of sales N2 4 960  
Wages N3 300  
Stationery N4 652  
Telephone N5 135  
Packaging material N6 1 740  
Repairs N7 621  
Totals   47 753 47 753
       

ACTIVITY1

ASSIGNMENT 2

CASH PAYMENTS JOURNAL OF HATTING DEALERS - APRIL 2003 CPJ 3.7.1

Table 16
Doc Day Name of payee Fol Bank Trading inventory Cost of materials Wages Creditors control
Sundries Account
Amount Fol Details
200 2 Perfectum Builders   80 000 -                 80 000 - B2 Land and Buildings
201 3 Stylish Equipment   4 500 -                 4 500 - B3 Equipment
202 4 Cash   180 -                 180 - B8 Change
203   Caro Ltd.   2 675 -     2 675 -                
204 7 Cash   560 -         560 -            
205 10 Trust Brokers   600 -                 600 - N5 Insurance
206 14 Cash   560 -         560 -            
207   ZY Wholesalers   6 130 - 5 950 -             180 - N6 Stationery
208 16 Larnie Furnishers   3 760 -             3 760 -        
209 17 Caro Ltd.   2 896 -     2 896 -                
210   Cash   560 -         560 -            
211   Wesco Distributors   3 875 - 3 875 -                    
212 28 Cash   560 -         560 -            
213 30 J Henning   2 110 -                 2 110 - N7 Salary
214   Bengo Wholesalers   14 994 -             14 994 -        
        123 960 - 9 825 - 5 571 - 2 240 - 18 754 - 87 570 -    
        B7   B5   N8   N9   B9          

ACTIVITY1

ASSIGNMENT 2

CASH RECEIPTS JOURNAL OF HATTING DEALERS - APRIL 2003 CRJ 3.7.1

Table 17
Doc Day Details Fol Analysis Bank Sales Selling costs Current income Debtors control
Sundries Account
Amount Fol Details
01 1 P. Hatting   105 000 - 105 000 -                 105 000 - B1 Capital
KR 5 Services provided   2 160 - 2 160 -         2 160 -            
02 7 V. Jansen   660 -                 660 -        
    Blommie Florists   500 -                     500 - N4 Rental income
KP 7 Sales   5 800 - 6 960 - 5 800 - 4 600 -                
03 14 D. Coetzee   300 - 300 -             300 -        
KR 17 Sales   3 820 -     3 820 - 2 440 -                
KR   Services provided   3 220 - 7 040 -         3 220 -            
04 21 G. Ferreira   200 -                 200 -        
KR   Sales   7 620 - 7 820 - 7 620 - 5 740 -                
KR 25 Services provided   1 736 - 1 736 -         1 736 -            
05 28 V. Jansen   246 -                 246 -        
KR   Sales   1 944 - 2 190 - 1 944 - 1 406 -                
            133 206 - 19 184 - 14 186 - 7 116 - 1 406 - 105 500 -    
            B7   N1   N3/B5   N2   B6          

ACTIVITY1

ASSIGNMENT 2

CREDITORS JOURNAL OF HATTING DEALERS FOR APRIL 2003 CJ 3.7.1

Table 18
Invoice Day Creditors Fol Creditors control Trading inventory Cost of materials Stationery
Sundries Account
Amount Fol Details
100 3 Larnie Furnishers   3 760 -             3 760 - B3 Equipment
101 5 Bengo Wholesalers   8 844 - 8 844 -                
102 6 Willow Suppliers   2 500 -     2 500 -            
103 7 Pen and Paper   228 -         228 -        
104 9 Bengo Wholesalers   4 750 - 4 750 -                
105 15 Toledo Motors   28 660 -             28 660 - B4 Vehicles
106 17 Willow Suppliers   3 420 - 3 000 - 420 -            
107 19 Pen and Paper   106 -         106 -        
108 26 Bengo Wholesalers   1 400 - 1 400 -                
        53 668 - 17 994 - 2 920 - 334 - 32 420 -    
        B8   B5   N8   N6          

ACTIVITY 1

ASSIGNMENT 2

Debtors Journal of Hatting Dealers DJ 3.7.1

Table 19
Inv. Day Debtors Fol Sales Selling costs
  4 V Jansen   660 495
  10 D Coetzee   890 712
  13 G Ferreira   260 128
  16 D Coetzee   106 84
  17 V Jansen   246 184
  26 G Ferreira   340 272
        2 502 1 875
        B6/N1 B5/N3

ACTIVITY

ASSIGNMENT 2

General Ledger of Hatting Dealers

Table 20
    Balance Sheet Section      
Date Details Fol Amount   Date Details Fol Amount  
    Capital 2003 B1    
            Apr. 1 Bank CRJ3.7.1 105 000 -
    Land and Buildings B2    
Apr. 2 Bank CPJ3.7.1 80 000              
    Equipment B3    
Apr. 3 Bank CPJ3.7.1 4 500              
  3 Creditors control CJ3.7.1 3 760              
        8 260              
    Vehicles B4    
Apr. 15 Creditors control CJ3.7.1 28 660              
    Trading Inventory B5    
Apr. 30 Bank CPJ3.7.1 9 825   Apr. 30 Trading Inventory CRJ3.7.1 14 186  
  30 Creditors control CJ3.7.1 17 994     30 Trading Inventory DJ3.7.1 1 875  
                Balance b/f 11 758  
        27 819           27 819  
Mei 1 Balance a/b 11 758              
    Debtors Control B6    
Apr. 30 Sales DJ3.7.1 2 502   Apr. 30 Bank CRJ3.7.1 1 406  
                Balance b/f 1 096  
        2 502           2 502  
Mei 1 Balance c/f 1 096              
Table 21
    Bank B7    
Apr. 30 Total Receipts CRJ3.7.1 133 206   Apr. 30 Total Payments CPJ3.7.1 123 960  
                Balance b/f 9 246  
        133 206           133 206  
May 1 Balance c/f 9 246              
    Change B8    
Apr. 4 Bank CPJ3.7.1 180              
    Creditors Control B9    
Apr. 30 Bank CPJ3.7.1 18 754   Apr. 30 Sundry purchases CJ3.7.1 53 668  
    Balance c/f 34 914              
        53 668           53 668  
            May 1 Balance b/f 34 914  
    Nominal Accounts Section      
    Sales N1    
            Apr. 30 Bank CRJ3.7.1 19 184  
              30 Debtors control DJ3.7.1 2 502  
                    21 686  
    Current Income N2    
            Apr. 30 Bank CRJ3.7.1 7 116 -
    Selling Costs N3    
Apr. 30 Trading inventory CRJ3.7.1 14 186              
    Trading inventory DJ3.7.1 1 875              
        16 061              
    Rental Income N4    
            Apr. 7 Bank CRJ3.7.1 500  
    Insurance N5    
Apr. 10 Bank CPJ3.7.1 600              
    Stationery N6    
Apr. 14 Bank CPJ3.7.1 180              
  30 Creditors control CJ3.7.1 334              
        514              
    Salary N7    
Apr. 30 Bank CPJ3.7.1 2 110              
    Cost of Materials N8    
Apr. 30 Bank CPJ3.7.1 5 571              
  30 Creditors control CJ3.7.1 2 920              
        8 491              
    Wages N9    
Apr. 30 Bank CPJ3.7.1 2 240              

ACTIVITY 1

ASSIGNMENT 2

TRIAL BALANCE OF HATTING DEALERS AS AT 30 APRIL 2003

Table 22
    Dt. Cr.
Balance Sheet section      
Capital B1   105 000
Land and Buildings B2 80 000  
Equipment B3 8 260  
Vehicles B4 28 660  
Trading inventory B5 11 758  
Debtors control B6 1 096  
Bank B7 9 246  
Change B8 180  
Creditors control B9   34 914
       
Nominal Accounts section      
Sales N1   21 686
Current income N2   7 116
Cost price of sales N3 16 061  
Rental income N4   500
Insurance N5 600  
Stationery N6 514  
Salary N7 2 110  
Cost of materials N8 8 491  
Wages N9 2 240  
    169 216 169 216
       

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