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

How is an initial trial balance prepared?

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

What do Debit balances include accounts for?

Debit balances include accounts for:

-Purchases
-Sales Returns
-Fixed Assets

-Inventory
-Expenses
-Sales ledger control

-Petty Cash control

3

What do Credit balances include accounts for?

Credit Balances include accounts for:

-Sales
-Purchases Returns
-Income

-Capital
-Loan
-Purchases ledger control

4

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

Debit / Credit

Depending on the circumstances.

5

What should be the same for the initial trial balance?

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

6

The initial trial balance checks what?

The arithmetical accuracy of the double-entry book keeping.

ie. That the debit entries equal the credit entries.

7

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

Either in the addition of the trial-balance
and/or in the double entry book-keeping.

8

What should be done with errors?

Any error must be traced and corrected.