Page 36 - DMGT403_ACCOUNTING_FOR_MANAGERS

Unit 2: Recording of Transactions

Notes

Notes Office rent account is bearing debit balance.

Dr Interim Dividend Account Cr

Date Particulars Date Particulars
To Balance c/d 3,000 Feb 2 By Cash 3,000

3,000 3,000
By Balance B/d 3,000

Notes Interim dividend account is having the credit balance.
Dr Bank Account Cr

Date Particulars Date Particulars
To Balance c/d 2,000 Feb 2 By Cash 2,000

2,000 2,000
By Balance B/d 2,000

Notes Bank account is having the credit balance. Nothing but overdraft.

2.8 Trial Balance

The third stage is to prepare the statement (summary) of accounting balances and their names
for the specified accounting period, known as Trial Balance.
Trial Balance is a list of accounting balances and their names; of the enterprise during the
specified period, which includes debit and credit balances of the various balanced ledger accounts
out of the journal entries.

From the above illustrated example, there are eleven different ledger accounts of the enterprise
which posted out of the journal entries already transacted, are finally balanced. The balanced
ledger accounts should be prepared as a summary list of their balances and names. The total of
both balances are equivalent to each other. The major reason for the equivalent balances on both
sides is only due to posting of entries to the tune of Double Entry Accounting Concept (Or)
Duality Concept. This is a concept that equates the total amount of resources raised with the total
amount of applications of the enterprise.

Purposes of preparing the Trial Balance
1. To prepare a statement of disclosure of final accounting balances of various ledger accounts
on a particular date.

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