GSEB Class 11 Solutions Chapter 10 Trial Balance

Write the correct option from those given below each question :

Question 1. After which stage trial balance is prepared ?
(a) After journal
(b) After adjustment
(c) After ledger
(d) Before ledger
Answer: (c) After ledger
In simple words: The trial balance is made after the ledger accounts are completed.

Exam Tip: Students should remember the sequence of accounting processes: Journal \(\rightarrow\) Ledger \(\rightarrow\) Trial Balance.

Question 2. What is prepared on the basis of a trial balance ?
(a) Annual accounts
(b) Adjustments
(c) Ledger
(d) Subsidiary books
Answer: (a) Annual accounts
In simple words: Trial balance acts as a basic document for getting ready the yearly financial reports of a business.

Exam Tip: The trial balance is a key input for preparing the final financial statements like the income statement and balance sheet.

Question 3. What is the duration of accounts disclosed in a trial balance ?
(a) 1 year
(b) Of any time
(c) Of 6 months
(d) Of 3 months
Answer: (a) 1 year
In simple words: A trial balance usually covers financial data for one full year, matching the standard accounting period.

Exam Tip: The typical accounting period for a trial balance is one year, but it can be prepared for shorter periods if needed.

Question 4. What are the methods to prepare a trial balance ?
(a) Only in a statement form
(b) Only in account form
(c) Any other method
(d) (a) and (b) both
Answer: (d) (a) and (b) both
In simple words: You can create a trial balance using either a statement layout or an account layout; both are accepted ways.

Exam Tip: Both statement form and account form methods are valid for trial balance preparation, each having specific uses.

Question 5. Mathematically, correct trial balance means .....................
(a) excess balance on debit sides
(b) excess balance on credit side
(c) identical total on both sides
(d) zero total on both sides
Answer: (c) identical total on both sides
In simple words: A trial balance is mathematically correct when the total amounts on its debit side match exactly the total amounts on its credit side.

Exam Tip: The primary goal of a trial balance is to ensure mathematical equality between total debits and total credits, indicating arithmetical accuracy of ledger postings.

Question 2. Answer the following questions in one sentence :
(1) When is a trial balance called 'mathematically correct' ?
Answer: A trial balance is called 'mathematically correct' when the sums of debit balances and credit balances, presented in it, are the same.
In simple words: A trial balance is 'mathematically correct' when the total debits equal the total credits.

Exam Tip: Emphasize that 'mathematically correct' refers specifically to the equality of total debits and total credits.

Question 2.
(2) How many sides are there of a trial balance ?
Answer: A trial balance has no specific sides, as it is considered a statement and not an actual account.
In simple words: A trial balance doesn't have sides because it's a list, not an account.

Exam Tip: Clearly distinguish a trial balance as a statement, not a ledger account, to explain why it lacks traditional 'sides'.

Question 2.
(3) What do you know about the total of both the sides of a trial balance ?
Answer: The overall totals of the debit and credit sides of a trial balance should always match.
In simple words: The total of the debit side and the total of the credit side in a trial balance always have to be equal.

Exam Tip: Highlight the fundamental accounting principle that total debits must always equal total credits in a trial balance.

Question 3. Answer the following questions in two or three sentences :
(1) Explain total methods and balance methods.
Answer: Following are the methods of preparing a trial balance:
1. **Totalling Method:** In this method, we do not aim to find the balance, but rather calculate the total amounts of the debit and credit sides for all accounts. Next, on a different page or in a ledger, the sums of both sides of an account are recorded along with the account's name. Even if the account balances (both totals are the same), the sum of both sides is still taken into account. If the debit and credit totals for accounts in a register are identical, it indicates that the accounts are arithmetically sound. If a discrepancy exists, an error needs to be identified.
2. **Balancing Method:** With this approach, the balance of every account is determined. After that, on a sheet of paper, using a specific layout, the debit and credit balances are listed. Subsequently, the sums of all debit balances and all credit balances are calculated, and these two totals must match. This particular method is generally preferred for creating a trial balance.
In simple words: The 'totaling method' sums all debits and credits from accounts. The 'balancing method' uses only the final balance from each account. Both methods aim for equal totals in the trial balance.

Exam Tip: Understand that the Totalling method considers all entries, while the Balancing method only takes the final balance of each account, which is more common in practice.

Question 3.
(2) Explain statement form and Account form of trial balance.
Answer: A trial balance can be created in either of two main formats:
1. Statement form (which is also known as Journal form)
2. Account form (often called 'T' form or Ledger form)

Here's a detailed explanation of each form:

1. **Statement form (Journal form):**

The explanation of columns details that the first column holds account names. The second column, the L.F. (Ledger Folio) column, contains the ledger page number. In the third column, amounts with debit balances are shown, and in the fourth column, amounts with credit balances are presented.

2. **Account form ('T' or Ledger form):**
This particular trial balance has two principal sides: a left-hand side and a right-hand side. Each of these sides has three columns, specifically for the name of the accounts, the Ledger Folio (L.F.) number, and the Amount (Rs.).

1. **Left-hand side:** On the left-hand side, the initial column lists the names of accounts that possess debit balances. The second column, known as the Ledger Folio (L.F.) column, includes the page number from the ledger. The third column then shows the balance amount of the account in numerical form.
2. **Right-hand side:** On the right-hand side, the first column displays the names of accounts that hold credit balances. The second column is where the Ledger Folio (L.F.) number is placed. The third column subsequently presents the balance amount of that account in numerical figures.
In simple words: For the statement form, you list account names, then their ledger page numbers, then debit amounts, and finally credit amounts. The account form has left and right sides, each with account name, ledger page number, and amount.

Exam Tip: Be ready to draw and label both statement and account forms, clearly showing where debit and credit balances are placed.

Question 3.
(3) Explain two features of trial balance.
Answer: Here are two key characteristics of a trial balance:
1. **It is a Statement:** The trial balance serves as a statement or a list, not an actual account.
2. **Specific Period:** A trial balance relates to a defined time frame. Typically, it is created at the conclusion of an accounting period. A period of one year refers to 12 months, but a trial balance can also be compiled for shorter periods than 12 months.
In simple words: A trial balance is a list of balances, not an account itself. It covers a specific time, usually one year, but can be shorter.

Exam Tip: Remember that the trial balance is a summary statement of ledger balances at a particular date, not an account.

Question 3.
(4) Explain two objectives of trial balance.
Answer: These are two main purposes of a trial balance:
1. **Arithmetical Accuracy:** It helps confirm that accounts have been accurately and correctly recorded from transactions, free from any mathematical errors.
2. **Locate Errors and Rectify:** If the sums of debit and credit balances in a trial balance do not match, it signals that errors need to be found and corrected promptly.
In simple words: It helps check if calculations are correct and find any mistakes in the accounting records.

Exam Tip: Focus on the two main objectives: ensuring mathematical accuracy of ledger postings and aiding in error detection.

Question 3.
(5) When is the concept of true and fair realized ?
Answer: Before developing final accounts, it is crucial to confirm the arithmetical accuracy of the accounts entered in the ledger. In both the journal and the ledger, appropriate accounts will be debited and credited with corresponding amounts. Consequently, at the close of a specific period, once the balance or total of each account is ascertained, a trial balance is created. If the totals on both sides of the trial balance are identical, it indicates that the debited and credited amounts in the account books are correct. Thus, the trial balance guarantees that accounts are recorded properly.
In simple words: The idea of 'true and fair' is realized when, after preparing a trial balance, both sides (debit and credit) match, confirming that all account entries are arithmetically correct before making final accounts.

Exam Tip: Explain that 'true and fair' is achieved when the trial balance proves arithmetical accuracy, which is a prerequisite for reliable final accounts.

Question 4. From the given information, prepare a trial balance of Pravin Patel as on 31-3-'16 :

Given Accounts and Amounts:
Opening Stock: Rs. 7,440, Wages: Rs. 4,000, Sales: Rs. 48,000, Repairing: Rs. 800, Tax: Rs. 600, Land-Building: Rs. 2,400, Plant-Machinery: Rs. 3,000, Electricity Expenses: Rs. 920, Capital: Rs. 16,000, Office Salary: Rs. 1,000, Patent: Rs. 400, Bank Balance: Rs. 1,800, Bank Loan: Rs. 1,760, Carriage Inward: Rs. 1,200, Purchase: Rs. 30,000, Carriage Outward: Rs. 600, Debtors: Rs. 8,000, Cash Balance: Rs. 80, Loose Tools: Rs. 720, Creditors: Rs. 3,200, Sundry Incomes: Rs. 240, Office Furniture: Rs. 240, Goodwill: Rs. 6,000.

Answer: Based on the provided account information, the trial balance for Shri Pravin Patel as on 31-3-'16 is prepared below, showing the debit and credit balances that sum up to an equal total.

In simple words: The trial balance combines all debit and credit account balances for Pravin Patel on a specific date, ensuring total debits equal total credits.

Exam Tip: Remember to classify each account as either debit or credit based on its nature (assets/expenses are debits; liabilities/revenues/capital are credits).

Question 5. From the following balances of accounts prepare a trial balance of Sfarl Brijmohan as on 31-3-'16:

Given Balances:

Answer: This trial balance combines all the account balances for Sfarl Brijmohan on a specific date, arranging them into debit and credit columns to show they are equal.

In simple words: This trial balance combines all the account balances for Sfarl Brijmohan on a specific date, arranging them into debit and credit columns to show they are equal.

Exam Tip: Pay attention to correctly identifying whether each account has a debit balance or a credit balance when transferring from the given list to the trial balance format.

Question 6. Trial balance prepared by Shri Vallabh is as follows. If any error lies in it, prepare a modified trial balance and give reasons for it.

Original Trial Balance for Shri Vallabh:

Answer: The modified trial balance for Shri Vallabh is prepared below, addressing the identified errors. After corrections, the trial balance should balance correctly.

Reasons for modified trial balance:
(1) The following balances were incorrectly shown in the original trial balance:

(2) Closing stock, although present in the initial trial balance, will not appear in the adjusted trial balance. Even after these corrections, the trial balance did not match, so the remaining difference of Rs. 7,000 is entered in the credit balances under a Suspense Account to make it tally.
In simple words: Closing stock is removed from the modified trial balance. A Suspense Account for Rs. 7,000 is added to the credit side to fix the total difference.

Exam Tip: Always remember that closing stock is typically not included in the trial balance. Any remaining discrepancy after corrections often necessitates a suspense account.

Question 7. The trial balance of Shri Pareshkumar as on 31-3-16 shows a difference in the total of debit and credit balances. Ascertain errors and prepare a modified trial balance.

Original Trial Balance for Shri Pareshkumar as on 31-3-16:

Answer: The original trial balance of Shri Pareshkumar shows a difference between its debit and credit totals, indicating errors. Upon review, the following errors were identified, and a modified trial balance has been prepared to correct these discrepancies and achieve balance.

Here are the identified errors:
1. **Rent Paid:** This is an expense, so it should have a debit balance. In the original trial balance, it was incorrectly shown with a credit balance of Rs. 1,800.
2. **Income Tax:** Typically, Income Tax is an expense or an appropriation of profit, and thus it should have a debit balance. In the original trial balance, it was incorrectly shown with a credit balance of Rs. 1,800.

After correcting these classification errors, the modified trial balance is as follows:

In simple words: Two errors were found in Pareshkumar's trial balance: Rent Paid and Income Tax were on the wrong side. The updated table shows the corrected balances, which now match on both sides.

Exam Tip: Always double-check the classification of accounts (assets, liabilities, expenses, revenues, capital) to ensure they are placed on the correct debit or credit side of the trial balance. Errors of classification are common and impact balancing.