NIOS Class 12 Accountancy Chapter 9 Trial Balance Solutions English Medium As Per New Syllabus. to each chapter is provided in the list so that you can easily browse throughout different chapters NIOS Class 12 Accountancy Chapter 9 Trial Balance Notes and select need one. NIOS Class 12 Accountancy Chapter 9 Trial Balance Question Answers Download PDF. NIOS Study Material of Class 12 Accountancy Paper Code: 320.
NIOS Class 12 Accountancy Chapter 9 Trial Balance
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Trial Balance
Chapter: 9
| Module – 2: Trial Balance and Computers |
INTEXT QUESTIONS 9.1
Fill in the blanks with suitable word or words:
(i) Trial balance has ___________ column and ___________ column of balances of accounts.
Ans: Debit, Credit.
(ii) If totals of two columns of Trial Balance are equal it means the ___________ is correct.
Ans: Ledger Posting.
(iii) Trial Balance proves only the ___________ accuracy of ledger posting.
Ans: Arithmetical.
(iv) One of the objectives of preparing Trial Balance is helping to locate ___________.
Ans: Accounting Errors.
(v) While preparing ___________ the ledger account balances are carried from the Trial Balance.
Ans: Financial Statements.
INTEXT QUESTIONS 9.2
Fill in the blanks with suitable word/words:
(i) Trial Balance has ___________ columns.
Ans: Three.
(ii) There are ___________ methods of preparing Trial Balance.
Ans: Three.
(iii) In practice, method of preparing Trial Balance is ___________ used.
Ans: Balance.
(iv) The last step of preparing trial balance is to ascertain the ___________ of its two amount columns.
Ans: Sum.
INTEXT QUESTIONS 9.3
Answer the following in one or two words:
(i) If the totals of two amount columns of trial balance do not agree, in which account the difference amount is written?
Ans: Suspense A/c.
(ii) If the total of the debit column of a trial balance is more than the total of its credit column, in which of the two amount columns of the trial balance will you write the difference in amount?
Ans: Credit Side.
(iii) If the total of the Purchases Book is posted to Purchases Account wrongly, will the trial balance still agree?
Ans: No.
(iv) When the accounting error or errors are rectified what happens to the suspense A/c?
Ans: Suspense A/c Disappears.
| TERMINAL EXERCISE |
1. State the meaning of Trial Balance.
Ans: Trial Balance is a statement prepared at the end of an accounting period to check the arithmetical accuracy of ledger posting. It contains the balances of all ledger accounts, with debit balances shown in the debit column and credit balances in the credit column.If the total of both columns is equal, it indicates that the posting in the ledger is arithmetically correct.
2. Explain in brief the objective of preparing Trial Balance.
Ans: Following are the objectives of preparing Trial Balance:
(i) To Check Arithmetical Accuracy: Arithmetical accuracy in ledger posting means writing correct amount, in the correct account and on its correct side while posting transactions from various original books of accounts, such as Cash Book, Purchases Book, Sales Book, etc. It also means not only the correct balance of ledger account but also the totals of the special purpose Books.
(ii) To Help in Preparing Financial Statements: The ultimate objective of the accounting is to prepare financial statements i.e. Trading and Profit and Loss Account, and Balance sheet of a business enterprise at the end of an accounting year. These statements contain balances of various ledger accounts. As Trial Balance contains balances of all ledger accounts, in financial statements the balances of ledger accounts are carried from the Trial balance for proper analysis.
(iii) Helps in Locating Errors: If total of two columns of the trial balance agrees it is a proof of arithmetical accuracy in the ledger posting. However, if the totals of the two columns do not tally it indicates that there are some mistake in the ledger accounts. This prompts the accountant to find out the errors.
(iv) Helps in Comparison: Comparison of ledger account balances of one year with the corresponding balances with the previous year helps the management taking some important decisions. This is possible by using the Trial Balances of the two years.
(v) Helps in Making Adjustments: While making financial statements adjustments regarding closing stock, prepaid expenses, outstanding expenses etc are to be made. Trial balance helps in identifying the items requiring adjustments in preparing the financial statements.
3. Why do the totals of two sides of Trial Balance are equal? Explain.
Ans: The totals of the two sides of a Trial Balance are equal because it is based on the double entry system of accounting, where every transaction has two aspects—debit and credit—of equal amount.
Whenever a transaction is recorded, one account is debited and another account is credited with the same amount. Therefore, the total of debit balances and the total of credit balances in the ledger must be equal.
(i) All business transactions are recorded with equal debit and credit amounts.
(ii) These transactions are posted into ledger accounts, maintaining equality on both sides.
(iii) While preparing the Trial Balance, all debit balances are placed in one column and all credit balances in another column.
(iv) Since total debits are always equal to total credits, both columns of the Trial Balance must tally.
4. ‘Agreement of Trial Balance is not the conclusive proof of the accuracy of accounts’. Comment.
Ans: The agreement of a Trial Balance is not a conclusive proof of the accuracy of accounts because even if the totals of debit and credit columns are equal, some errors may still exist in the books. This is because Trial Balance only checks the arithmetical accuracy of recording and posting. Errors such as omission of transactions, recording in the wrong account, compensating errors, or errors of principle do not affect the agreement of Trial Balance. For example, if a transaction is completely omitted or recorded on both sides with the same wrong amount, the Trial Balance will still tally. Therefore, although agreement of Trial Balance indicates arithmetical correctness, it does not guarantee that the accounts are completely free from errors.
5. What is Suspense A/c? What is its role in preparing Trial Balance?
Ans: Suspense Account is a temporary account opened to record the difference in the Trial Balance when the totals of debit and credit columns do not agree. When there is a difference, the amount is placed in the Suspense Account on the shorter side of the Trial Balance to make it balanced.
The main role of Suspense Account is to temporarily rectify the disagreement in Trial Balance until the errors causing the difference are identified and corrected. Once all the errors are rectified, the Suspense Account is closed and its balance becomes nil.
6. Explain the steps that are taken to prepare a Trial Balance.
Ans: Steps to prepare Trial Balance:
(i) At first ascertain the balance account wise of all the ledger accounts.
(ii) Write the name of the ledger account in the ledger account column.
(iii) Write against the name of the ledger account, the balance amount/total amount, debit balance/total in the debit column; and credit balance/total in the credit column.
(iv) Add the debit balance/total amount column and credit balance/total amount column.
7. List the various reasons because of which the totals of two columns of Trial Balance do not tally.
Ans: The reasons due to which the totals of the two columns of Trial balance may not agree can be listed as follows:
(i) The totals of the Special Purpose Books like Sales Book, Purchases Book, etc are not done correctly or there is some mistake in the posting of these totals in their respective accounts in the ledger.
(ii) The items from different Special Purpose Books and Journal may be posted to the wrong side of the account or a wrong amount is posted or posted to the wrong account.
(iii) The balancing of an account is not done correctly.
(iv) There may be mistake in carrying balance from the ledger account to the Trial Balance.
8. Prepare Trial Balance of M/s Multiplying Enterprise as on 31st December, 2014.
| Accounts | Balances (₹) | Accounts | Balances (₹) |
| Cash in Hand | 2,500 | Debtors | 18,200 |
| Cash at Bank | 14,500 | Creditors | 16,600 |
| Capital | 70,000 | Opening Stock | 8,700 |
| Drawing | 9,000 | Wages | 6,700 |
| Purchases | 60,000 | Rent | 5,000 |
| Sales | 82,000 | Salary | 8,400 |
| Machine | 35,000 | Bills Payable | 11,400 |
| Furniture | 12,000 |
Ans:
| Particulars | Debit (₹) | Credit (₹) |
| Cash in Hand | 2,500 | — |
| Cash at Bank | 14,500 | — |
| Debtors | 18,200 | — |
| Opening Stock | 8,700 | — |
| Drawings | 9,000 | — |
| Wages | 6,700 | — |
| Purchases | 60,000 | — |
| Rent | 5,000 | — |
| Salary | 8,400 | — |
| Machinery | 35,000 | — |
| Furniture | 12,000 | — |
| Creditors | — | 16,600 |
| Bills Payable | — | 11,400 |
| Capital | — | 70,000 |
| Sales | — | 82,000 |
| Total | 179,000 | 179,000 |
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