These eight questions follow the lessons in the trial balance guide. Write each answer on paper first, then open the answer. All amounts are in RM.
Questions
1. State whether each account normally has a debit or credit balance: Sales, Drawings, Rent expense, Creditors, Capital, Equipment.
Answer
Debit: Drawings, Rent expense, Equipment. Credit: Sales, Creditors, Capital. The usual wrong turn is placing Drawings with Capital.
2. The balances are: Bank 5 800, Debtors 3 600, Equipment 12 000, Purchases 9 500, Wages 2 700, Sales 14 900, Creditors 2 100, and Capital. Find the capital.
Answer
Debit: 5 800 + 3 600 + 12 000 + 9 500 + 2 700 = 33 600.
Credit without capital: 14 900 + 2 100 = 17 000.
Capital: 33 600 − 17 000 = 16 600.
3. A trial balance shows debits of 18 420 and credits of 18 240. List two quick facts about the difference that help you search.
Answer
The difference is 180. Half of it is 90, so look for a 90 balance on the wrong side. It also divides by 9 (180 ÷ 9 = 20), so a transposition such as 1 350 written as 1 530 is possible.
4. Which of these would stop a trial balance from agreeing? (a) a credit sale of 300 left out completely, (b) a debit of 450 with no matching credit, (c) 80 posted to the wrong expense account, (d) a balance of 700 added as 7 000.
Answer
(b) and (d) disturb agreement. Omission (a) and commission (c) leave both totals equal.
5. A telephone bill of 75 was debited to the Electricity account. Name the error and write the correcting entry.
Answer
Both are expenses, so this is an error of commission. Correcting entry: Debit Telephone 75, Credit Electricity 75.
6. Cash of 500 was paid to a creditor, but the entry was Debit Bank 500, Credit Creditors 500. Write the correcting entry.
Answer
This is a reversal, so the correction is for double the amount: Debit Creditors 1 000, Credit Bank 1 000. An entry of 500 leaves the books half wrong.
7. A trial balance has debits of 36 450 and credits of 36 200, so a suspense account is opened. Later a sale of 250 is found to have been debited to Debtors, with the credit to Sales left out.
Show the suspense balance and the correcting entry.
Answer
The credit column is short by 250, so suspense is a credit balance of 250.
Correcting entry: Debit Suspense 250, Credit Sales 250. Suspense becomes nil.
8. Equipment costing 2 000 was debited to Purchases, and the trial balance agrees.
What is the effect on profit, ignoring depreciation?
Answer
This is an error of principle. Purchases are overstated by 2 000, so profit is understated by 2 000. Correct by Debit Equipment 2 000, Credit Purchases 2 000.
If you got these wrong
- Questions 1, 2: revisit preparing a trial balance.
- Questions 3, 4: read finding errors that disturb agreement.
- Questions 5, 6, 8: read errors a trial balance cannot reveal.
- Question 7: read using a suspense account.
Use the trial balance and adjustment explorer and timed practice builder to keep practising. A teacher can coach the order of checks in online one-to-one Accounting tuition.