Chapter 11: The Initial Trial Balance Flashcards Preview

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Flashcards in Chapter 11: The Initial Trial Balance Deck (8)
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1
Q

How is an initial trial balance prepared?

A

An initial trial balance is prepared by

Taking the balances brought down of each account in the ledger

And setting them out in Debit & Credit Columns.

2
Q

What do Debit balances include accounts for?

A

Debit balances include accounts for:

  • Purchases
  • Sales Returns
  • Fixed Assets
  • Inventory
  • Expenses
  • Sales ledger control

-Petty Cash control

3
Q

What do Credit balances include accounts for?

A

Credit Balances include accounts for:

  • Sales
  • Purchases Returns
  • Income
  • Capital
  • Loan
  • Purchases ledger control
4
Q

What can the balances of bank control & VAT accounts be either?

A

Debit / Credit

Depending on the circumstances.

5
Q

What should be the same for the initial trial balance?

A

The totals of the columns for debit & credit balances should be the same.

6
Q

The initial trial balance checks what?

A

The arithmetical accuracy of the double-entry book keeping.

ie. That the debit entries equal the credit entries.

7
Q

If the initial trial balance fails to balance, where could the error be?

A

Either in the addition of the trial-balance

and/or in the double entry book-keeping.

8
Q

What should be done with errors?

A

Any error must be traced and corrected.