Page 74 - Office Practice and Accounting 10

Accounts that figure in trial balance

Debit

Bank, Motor vans, Furniture and fittings, Debtors, Machinery, Opening Stock,
Cash, Premises, Goodwill, Patent, Trademarks, Investment, Prepaid expenses,
Accrued income, Bills receivable, Copyright, Purchases, Carriage in and out,
Wages, Salaries, Advertising, Rent and rates, Printing and stationery, Discount
allowed, Bad debts written off, Depreciation, lighting and heating, Other
expenses, Insurance, Commission paid, Interest paid, Electricity charges,
Telephone charges, Traveling expenses, Administrative expenses, Drawing,
Stock taken for own use, Sales return, etc.

Credit

Capital, Creditors, Loans from others, Outstanding expenses, Unearned income,
Bank overdraft, Bills payable/Account payable, Unearned income, General reserve
Provision, Sales, Commission received, Rent received, Discount received, Bad debts
recovered, Dividend received, Provision for Depreciation account, Provision for
bad debts, Purchase return, Interest received.

Accounting errors
Total of debit and credit side of trial balance must be equal. If it is not equal, there
is error somewhere in the records. The mistake can be committed while recording
financial transactions into journals and posting in ledger which is known as accounting
errors. Such errors creep in books of account either due to the lack of knowledge of
accounting principles or owing to oversight. Generally, there are two types of errors
from the point of view of trial balance which are discussed below:

1. Errors disclosed by trial balance
2. Errors not disclosed by trial balance
1. Errors disclosed by trial balance

The following are errors which can be detected by preparing trial balance. Trial
balance disagrees if the following errors occur:
i. If amount is omitted to post into ledger: If any amount of one side is not posted
from journal in to ledger, two sides of the trial balance will not be equal.
ii. If total of subsidiary books is wrong: If there is any wrong totaling in subsidiary
books, this causes the disagreement in trial balance.
iii. If wrong amount is posted in ledger: Amount is correctly recorded in journal
but wrongly posted in ledger. It is the reason for disagreement of trial balance.
For e.g., furniture purchased for Rs. 5000 correctly recorded in journal but
forgotten to record either in cash or furniture account leads to mismatch of trial
balance by Rs. 5000.

68 Office Practice and Accounting 10