PLUS ONE ACCOUNTANCY NOTES CHAPTER 6 TRIAL BALANCE AND RECTIFICATION OF ERRORS Capsule Notes
CHAPTER 6: TRIAL BALANCE AND RECTIFICATION OF ERRORS – MICRO NOTES TRIAL BALANCE – MEANING & OBJECTIVES Definition: Statement listing all ledger accounts with their debit/credit balances to verify arithmetical accuracy of posting. Not part of final accounts, but a verification tool. Objectives: Check arithmetical accuracy, help locate errors, aid preparation of financial statements (Trading, P&L, Balance Sheet). Note: Tallied Trial Balance does NOT guarantee no errors (errors of principle, omission, compensating may exist). Exam Q (1 mark – 2021 Imp): Not an objective of Trial Balance? (b) To know the financial position of the business. METHODS OF PREPARING TRIAL BALANCE 1. Total Method: Totals of debit & credit sides of each account are taken. Rarely used. 2. Balance Method (Most common): Balances of each account placed in appropriate column. Assets, expenses, receivables = Debit balances; Liabilities, capital, revenues = Credit balances. 3. Totals-cum-Bala...