NCERT Class 11 Accountancy - Trail Balance and Rectification of Errors

NCERT Class 11 Accountancy - Trail Balance and Rectification of Errors.Download NCERT Chapters and Books in pdf format. Easy to print and read. Copies of these textbooks may be downloaded and used as textbooks or for reference. Refer to other chapters and books at other links (NCERT now providing you soft copies of all textbooks of all subjects from class first to twelfth online). 

Trial Balance and Rectification of Errors

In the earlier chapters, you have learnt about the basic principles of accounting that for every debit there will be an equal credit. It implies that if the sum of all debits equals the sum of all credits, it is presumed that the posting to the ledger in terms of debit and credit amounts is accurate. The trial balance is a tool for verifying the correctness of debit and credit amounts. It is an arithmetical check under the double entry system which verifies that both aspects of every transaction have been recorded accurately. This chapter explains the meaning and process of preparation of trial balance and the types of errors and their rectification.

6.1 Meaning of Trial Balance

A trial balance is a statement showing the balances, or total of debits and credits, of all the accounts in the ledger with a view to verify the arithmatical accuracy of posting into the ledger accounts. Trial balance is an important statement in the accounting process. which shows final position of all accounts and helps in preparing the final statements. The task of preparing the statements is simplified because the accountant can take the account balances from the trial balance instead of looking them up in the ledger. In the earlier chapters, you have learnt about the basic principles of accounting that for every debit there will be an equal credit. It implies that if the sum of all debits equals the sum of all credits, it is presumed that the posting to the ledger in terms  of debit and credit amounts is accurate. The trialbalance is a tool for verifying the correctness of debit and credit amounts. It is an arithmeticalcheck under the double entry system which verifies that both aspects of every transaction have been recorded accurately. This chapter explains the meaning and process of preparation of trial balance and the types of errors and their rectification.

6.1 Meaning of Trial Balance

A trial balance is a statement showing the balances, or total of debits and credits, of all the accounts in the ledger with a view to verify the arithmatical accuracy of posting into the ledger accounts. Trial balance is an important statement in the accounting process. which shows final position of all accounts and helps in preparing the final statements. The task of preparing the statements is simplified because the accountant can take the account balances from the trial balance instead of looking them up in the ledger.

6.2.1 To Ascertain the Arithmetical Accuracy of Ledger Accounts

As stated earlier, the purpose of preparing a trial balance is to asceitain whether all debits and credit are properly recorded in the ledger or not and that all accounts have been correctly balanced. As a summary of the ledger, it is a list of the accounts and their balances. When the totals of all the debit balances and credit balances in the trial balance are equal, it is assumed that the posting and balancing of accounts is arithmetically correct. However, the tallying of the trial balance is not a conclusive proof of the accuracy of the accounts. It only ensures that all debits and the corresponding credits have been properly recorded in the ledger.

6.2.2 To Help in Locating Errors

When a trial balance does not tally (that is, the totals of debit and credit columns are not equal), we know that at least one error has occured. The error (or errors) may have occured at one of those stages in the accounting process: (1) totalling of subsidiary books, (2) posting of journal entries in the ledger, (3) calculating account balances, (4) carrying account balances to the trial balance, and (5) totalling the trial balance columns.

Questions for Practice

Short Answers

1. State the meaning of a trial balance?

2. Give two examples of errors of principle?

3. Give two examples of errors of commission?

4. What are the methods of preparing trial balance?

5. What are the steps taken by an accountant to locate the errors in the trial balance?

6. What is a suspense account? Is it necessary that is suspense account will balance off after rectification of the errors detected by the accountant? If not, then what happens to the balance still remaining in suspense account?

7. What kinds of errors would cause difference in the trial balance. Also list examples that would not be revealed by a trial balance?

8. State the limitations of trial balance?

Long Answers

1. Describe the purpose for the preparation of trial balance.

2. Explain errors of principle and give two examples with measures to rectify them.

3. Explain the errors of commission and give two examples with measures to rectify them.

4. What are the different types of errors that are usually committed in recording business transaction.

5. As an accounts for a company, you are disappointed to learn that the totals in your new trial balance are not equal. After going through a careful analysis, you have discovered only one error. Specifically, the balance of the Office Equipment account has a debit balance of Rs. 15,600 on the  trial balance. However, you have figured out that a correctly recorded creditpurchase of pendrive for Rs 3,500 was posted from the journal to the ledger with a Rs. 3,500 debit to Office Equipment and another Rs. 3,500 debit to creditors accounrts. Answer each of the following questions and present the amount of any misstatement :

(a) Is the balance of the office equipment account overstated, understated, or correctly stated in the trial balance?

(b) Is the balance of the creditors account overstated, understated, or correctly stated in the trial balance?

(c) Is the debit column total of the trial balance overstated, understated, or correclty stated?

(d) Is the credit column total of the trial balance overstated, understated, or correctly stated?

(e) If the debit column total of the trial balance is Rs. 2,40,000 before correcting the error, what is the total of credit column.

 

Please refer to attached file for NCERT Class 11 Accountancy - Trail Balance and Rectification of Errors

Tags: 

 


Click to View or Download pdf file
Click for more Accountancy Study Material

Latest NCERT & CBSE News

Read the latest news and announcements from NCERT and CBSE below. Important updates relating to your studies which will help you to keep yourself updated with latest happenings in school level education. Keep yourself updated with all latest news and also read articles from teachers which will help you to improve your studies, increase motivation level and promote faster learning

Important announcement regarding rescheduling of Class 10 and 12 Board Exams

CBSE Board Exams 2020: Here's when Board will organize the CBSE Class X and Class XII Board Exams. All the candidates appearing for CBSE Standard X and Standard XII Board Exams 2020 can cross check the essential notice released by the board concerning rearrangement of...

Live session by CBSE Experts for holistic wellbeing

CBSE and Fit India Mission have collaborated to provide live sessions by experts covering a range of topics for holistic well-being of school going children, which will include simple actionable tips around Basic Exercises, Nutrition, Yoga & Meditation, boosting...

Class 10 Datesheet announced

CBSE has announced the date sheet for the remaining class 10 Board Exams, see dates below

CBSE Board Exams in July Press Release

CBSE has released press note for the dates for the CBSE Board exams for Class 10. CBSE said “With regards to conduct of Class X examinations several queries are being received by the CBSE. In this context, it is once again reiterated that remaining examinations of...

Applied Mathematics Introduced by CBSE as Elective for Class 11 and Class 12

Mathematics Syllabus Revised by CBSE at the Senior Secondary Level! The Central Board of Secondary Education (CBSE) to offer 'Applied Mathematics' as an Elective for XI and XII standard students. The elective subject, Applied Mathematics, is focused at evolving an...

CBSE advisory on student marks

CBSE has issued a public advisory for all students to be careful from unscrupulous persons impersonating themselves as officers/officials of CBSE. These people have been contacting parents and have been telling them that they have access to student marks data for Board...

×
Studies Today