Kế toán, kiểm toán - Chapter five: The trial balance

CHAPTER FIVEThe Trial Balance 1. Prepare a trial balance.2. Locate accounting errors in the trial balance and ledger accounts.3. Correct accounting errors in the trial balance and ledger accounts.THE TRIAL BALANCEObjectives:3Preparing the Trial BalanceThe first step is to pencil foot each account.Next, list the accounts and their balances in pencil.Debits and credits are totaled.If total debits equal total credits the trial balance is in balance.4Finding Errors in the Trial Balance and the AccountsTotal the trial balance columns again to make sure that the addition is correct.Check to see whether any account balance has been omitted from the trial balance.5Finding Errors in the Trial Balance and the Accounts (continued)Compare the figures on the trial balance with the account balances to verify that the correct amounts have been listed on the trial balance and that they were placed in the proper money columns.6Errors Not Revealed by the Trial BalanceOmitting a transaction completely.Debiting or crediting the wrong accounts.Entering the amount of a transaction incorrectly.Entering the same transaction twice.7Correcting Errors in the Trial Balance and the AccountsIf the error is in pencil you may erase it and replace with other penciled figures.If the error is in ink you must draw a single, ruled-line through the error and write the correct figure above it.8Correcting Errors in the Trial Balance and the Accounts (continued)If the wrong account is debited or credited, then an entry should be recorded to correct the error.9Accounting TerminologyAccounting errorsTrial balance10Chapter SummaryThe accuracy of the accounts must be checked before financial reports are prepared.The procedure for checking the equality of debits and credits in the accounts is called taking a trial balance.11Chapter Summary (continued)The first step in taking a trial balance is to find the balances of the accounts.The next step is to list the accounts and their balances. Then the debits and credits are totaled.The total of the debits should be equal to the total of the credits.12Chapter Summary (continued)The accounts are listed on the trial balance form in the order they appear in the ledger.If the trial balance is in balance, it is probable that the accounts in the ledger are correct. If the total debits and the total credits are not equal, the trial balance and the accounts must be checked to find and then correct the error.131. The procedure for checking the equality of debits and credits in the accounts is called taking a trial balance.2. If debits equal credits, it is probable that the trial balance is correct. 3. If the trial balance equals, there is no chance of an error.Topic QuizAnswer the following true/false questions:TRUEFALSETRUE14 Investigating on the InternetSources of information about trial balances are usually not found on corporate or business websites.As a research assignment, try to find a business website that shows trial balance information. If you find one, why is the information there? If you can not find one, why is the information not there?15(Return to Topic Quiz)3. If the trial balance equals, there is no chance of an error.FALSEThe wrong accounts may have been used in a transaction.16