Preparing a separate trial balance, Accounting Basics

Assignment Help:

Q. Preparing a separate trial balance?

As an alternative of preparing a separate trial balance as accountants uses the Trial Balance columns on a work sheet. The numbers and titles of the ledger accounts of Micro Train Company are on the left portion of the work sheet. Habitually only those accounts with balances as of the end of the accounting period are listed. Some accountants do catalogue the entire chart of accounts even those with zero balances. Suppose you are Micro Train's accountant. You catalogue the Retained Earnings account in the trial balance even though it has a zero balance to (a) show its relative position among the accounts and (b) indicate that December 2010 is the first month of operations for this company. Subsequently you enter the balances of the ledger accounts in the Trial Balance columns. The accounts are in the direct in which they appear in the general ledger assets, liabilities, stockholders' equity, dividends, revenues and expenses. After that total the columns. If the debit and credit column totals aren't equal an error exists that must be corrected before you proceed with the work sheet.

As you learned adjustments bring the accounts to their proper balances before accountants prepare the income statement, balance sheet and statement of retained earnings. You enter these adjustments in the Adjustments columns of the work sheet as well you cross reference the debits and credits of the entries by placing a key number or letter to the left of the amounts. This key number makes easy the actual journalizing of the adjusting entries later because you do not have to rethink the adjustments to record them. For instance the number (a) identifies the adjustment debiting Insurance Expense and crediting Prepaid Insurance. Note in the Account Titles column that the Insurance Expense account title is below the trial balance totals because the Insurance Expense account didn't have a balance before the adjustment and, therefore, did not appear in the trial balance.


Related Discussions:- Preparing a separate trial balance

Difference between income statement and balance sheet, Difference between I...

Difference between Income Statement and Balance Sheet Difference between the amounts of the columns in Income Statement and Balance Sheet should be the same amount. Words "Net

What is unbilled training fees, Q. What is Unbilled training fees? A co...

Q. What is Unbilled training fees? A company may possibly perform services for customers in one accounting period while it bills for the services in a different accounting peri

Split common stock 4 to 1 and reduced, Split common stock 4 to 1 and reduce...

Split common stock 4 to 1 and reduced PAR from $80 to $20. After the split there were 600,000 shares.

Departures from cost basis of inventory measurement, Q. Departures from cos...

Q. Departures from cost basis of inventory measurement? In general companies must use historical cost to value inventories and cost of goods sold. But some circumstances justif

Illustrate unearned service fees, Q. Illustrate unearned service fees? ...

Q. Illustrate unearned service fees? Micro Train reports the service income in its income statement for 2010. The company enters the USD 3000 balance in the Unearned Service Fe

How many kilograms of lobster must catch per day, A lobster catcher spends ...

A lobster catcher spends $12 500 per month to maintain a lobster boat.  He plans to catch an average of 20 days per month during lobster season.  For each day, he must allow approx

Nance''s restaurant, Nance's Restaurant, a local independent restaurant, is...

Nance's Restaurant, a local independent restaurant, is evaluating new point-of-sale (POS) systems and must determine if a new installation is feasible. A new POS installation wou

Explain about long-term investments, Q. Explain about Long-term investments...

Q. Explain about Long-term investments? A long-term investment habitually consists of securities of another company held with the intention of (a) obtaining control of another

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd