Double-Entry Bookkeeping and Trial Balance: Financial Accounting

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Table of Contents
Introduction.................................................................................................................................................2
Recording business transactions by use of double –entry bookkeeping.....................................................2
JANUARY 2017.........................................................................................................................................2
FEBRUARY 2018.......................................................................................................................................3
Trial Balance............................................................................................................................................7
PART 4.........................................................................................................................................................7
Conclusion...................................................................................................................................................8
References...................................................................................................................................................9
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Introduction
A trial balance is report to manage accounts and maintain books. It lists the balances in every of
general ledger account of the business (Rizun, 2016). Usually in the trial balance the accounts
with zero balances will not be displayed (Czine, 2019). The debit balance totals are recorded in a
column with the caption "Debit balances" and the credit balance totals are recorded in one more
column with the caption "Credit balances" (Fountoulakis, 2010). The sum of both these two
columns must match. For this all general entries have been recorded with the general ledgers and
then the final trial balance is created.
Recording business transactions by use of double –entry bookkeeping
JANUARY 2017
a. Cash A/c Dr. £23,500
To Alicia Masingale capital A/c £23,500
b. Rent expense on office and equipment A/c Dr. £4,000
To cash A/c £4,000
c. Supplies A/c Dr. £18,000
To Accounts Payable £18,000
d. Creditors A/c Dr. £675
To cash £675
e. Cash A/c Dr. £16,750
To sales commission £16,750
f. Automobile expense A/c Dr. £1,000
Miscellaneous expense A/c Dr. £800
To Cash A/c £1,800
g. Office Salaries A/c Dr. £2,150
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To Cash A/c £2,150
h. Supplies Expense A/c Dr. £925
To Supplies A/c £925
i. Alicia Masingale, Drawings A/c £1,600
To Cash A/c £1,600
FEBRUARY 2018
a. Cash A/c Dr. £47,000
To Alicia Masingale capital A/c £47,000
b. Rent expense on office and equipment A/c Dr. £8,000
To cash A/c £8,000
c. Supplies A/c Dr. £3600
To Accounts Payable £3600
d. Creditors A/c Dr. £1350
To cash £1350
e. Cash A/c Dr. £32500
To sales commission £32500
f. Automobile expense A/c Dr. £2000
Miscellaneous expense A/c Dr. £1000
To Cash A/c £3000
g. Office Salaries A/c Dr. £4300
To Cash A/c £4300
h. Supplies Expense A/c Dr. £1850
To Supplies A/c £1850
i. Alicia Masingale, Drawings A/c £3200
To Cash A/c £3200
CASH A/C
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January a Alicia Masingale
capital A/c 23,500.00
January b Rent expense on office and
equipment A/c 4,000.00
January e Sales Commission
16,750.00
January d Creditors A/c
675.00
February a Alicia Masingale
capital A/c 47,000.00
January f Automobile expense and
Miscellaneous expense 1,800.00
February e Sales Commission
32,500.00
January g Office Salaries A/c
2,150.00
January i Alicia Masingale,
Drawings A/c 1,600.00
February b Rent expense on office and
equipment A/c 8,000.00
February d Creditors A/c
1,350.00
February f Automobile expense and
Miscellaneous expense 3,000.00
February g Office Salaries A/c
4,300.00
February i i. Alicia Masingale,
Drawings A/c 3,200.00
Balance c/d 89,675.00
119,750.00 119,750.00
Balance B/d 89,675.00
Sales Commission A/c
Balance c/d 49,250.00 January e Cash A/c 16,750.00
February e Cash A/c 32,500.00
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49,250.00 49,250.00
Balance B/d 49,250.00
Rent Expense A/c
January b Cash A/c 4,000.00 Balance c/d 12,000.00
February b Cash A/c 8,000.00
12,000.00 12,000.00
Balance B/d 12,000.00
Supplies A/c
January c A/c payable 1,800.00 January h Supplies Expense A/c 925.00
February c A/c payable 3,600.00 February h Supplies Expense A/c 1,850.00
Balance c/d 2,625.00
5,400.00 5,400.00
Balance B/d 2,625.00
Office Salaries Expense A/c
January g Cash A/c 2,150.00 Balance c/d 6,450.00
February g Cash A/c 4,300.00
6,450.00 6,450.00
Balance B/d 6,450.00
Accounts Payable A/c
January d Cash A/c 675.00 January c Supplies A/c 1,800.00
February d Cash A/c 1,350.00 February c Supplies A/c 3,600.00
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Balance c/d 3,375.00
5,400.00 5,400.00
Balance B/d 3,375.00
Automobile Expense A/c
January f Cash A/c 1,000.00 Balance c/d 3,000.00
February f Cash A/c 2,000.00
3,000.00 1,000.00
Balance B/d 3,000.00
Supplies Expense A/c
January h Supplies A/c 925.00 Balance c/d 2,775.00
February h Supplies A/c 1,850.00
2,775.00 2,775.00
Balance B/d 2,775.00
Alicia Masingale, Capital
Balance c/d 70,500.00 January a Cash A/c 23,500.00
February a Cash A/c 47,000.00
70,500.00 70,500.00
Balance B/d 70,500.00
Alicia Masingale, Drawings
January i Cash A/c 1,600.00 Balance c/d 4,800.00
February i Cash A/c 3,200.00
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4,800.00 4,800.00
Balance B/d 4,800.00
Miscellaneous expenses
January f Cash A/c 800.00 Balance c/d 1,800.00
February f Cash A/c 1,000.00
1,800.00 1,800.00
Balance B/d 1800.00
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Trial Balance
Debit Balances £ Credit Balances £
Cash A/c 89,675.00 Sales Commission A/c 49,250.00
Rent Expense A/c 12,000.00 A/c payable 3,375.00
Supplies A/c 2,625.00 Alicia Masingale,
Capital 70,500.00
Office Salaries expense 6,450.00
Automobile A/c 3,000.00
Supplies Expense A/c 2,775.00
Alicia Masingale,
Drawings 4,800.00
Miscellaneous
expenses 1,800.00
Total 123,125.00 Total 123,125.00
PART 4
A suspense account is an account in the general ledger that is utilized to provisionally store
transactions that need additional assessment prior to a permanent allocation in the accounts can
be there (Bakaluba, 2011). It is vital to remember that items in a suspense account show
unassigned amounts. Thus, putting up a suspense account on the financial reports with a balance
is usually seen adversely and can deteriorate the report to external investors (Hora and
Chyzevska, 2013). Thus, work should be done for clearing the suspense accounts at the close of
every financial period.
For the given data, the
1. Sales Ledger Control Account £49,880
2. Less Overcast of balance - £200
3. Add amount of under cast of balance £1,000
4. Less Sales return - £600
5. Add bad debts debited incorrectly £579
6. TOTAL £50,659
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7. Balance for trial balance £50,659
Conclusion
The ledgers have all entries of the business during the given accounting period. Suspense
accounts are cleared by going through every transaction in the account (Wood, Sangster and
Wood, 2012). The goal for revaluating items is to move the transaction to the suitable account as
quickly as possible (Vomáčková, 2010).
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References
Bakaluba, M., 2011. The practical accounting process. [United Kingdom]: Custom Books.
Czine, Á., 2019. The Fair Trial on Balance. SSRN Electronic Journal.
Fountoulakis, K., 2010. The BALANCE trial. The Lancet, 375(9723), pp.1343-1344.
Hora, M. and Chyzevska, L., 2013. Accounting Regulation in Ukraine. European Financial and
Accounting Journal, 2013(1).
Rizun, P., 2016. Subchains: A Technique to Scale Bitcoin and Improve the User Experience.
Ledger, 1, pp.38-52.
Vomáčková, H., 2010. Accounting for Cross-border Mergers and Its Problems. European
Financial and Accounting Journal, 2010(2), pp.7-24.
Wood, F., Sangster, A. and Wood, F., 2012. Frank Wood's business accounting 1. Harlow
(England): Pearson Education Limited.
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