Level: Easy
Easy Worked Examples: Trial Balance
Six graded examples on preparing a Trial Balance from ledger and Cash Book balances, and on determining and recording closing inventory under the periodic inventory system.
One-hour paid trial · Same-day reply · from RM50/hr
Example 1: Identifying debit and credit balances
Question
Solution plan
The Trial Balance checks the accuracy of double entry. Assets (Cash, Motor vehicle) carry debit balances; Capital (owner's equity) carries a credit balance. Transfer each balance to the correct column and confirm total debit = total credit.
| Particulars | Debit (RM) | Credit (RM) |
|---|---|---|
| Capital | 20,000 | |
| Cash | 5,000 | |
| Motor vehicle | 15,000 | |
| Total | 20,000 | 20,000 |
Answer
Total debit RM20,000 equals total credit RM20,000, so the Trial Balance balances.
Where marks are usually lost
Example 2: Trial Balance with debtors and creditors
Question
Solution plan
Assets and expenses have debit balances: Cash, Purchases, Furniture, Debtors. Capital, Sales and Creditors have credit balances. Purchases is a cost (debit); Sales is revenue (credit); Debtors is an asset (debit); Creditors is a liability (credit).
| Particulars | Debit (RM) | Credit (RM) |
|---|---|---|
| Capital | 30,000 | |
| Cash | 8,000 | |
| Purchases | 20,000 | |
| Sales | 12,000 | |
| Furniture | 10,000 | |
| Debtors | 7,000 | |
| Creditors | 3,000 | |
| Total | 45,000 | 45,000 |
Answer
Total debit RM45,000 equals total credit RM45,000. The Trial Balance balances.
Where marks are usually lost
Example 3: Transferring balances from the Cash Book
Question
Solution plan
The Cash Book is the ledger for the Cash and Bank accounts. The debit balances of Cash and Bank are transferred straight to the debit column of the Trial Balance. Equipment (asset) and Purchases (cost) have debit balances; Capital, Sales and Creditors have credit balances.
| Particulars | Debit (RM) | Credit (RM) |
|---|---|---|
| Cash | 3,000 | |
| Bank | 12,000 | |
| Capital | 25,000 | |
| Purchases | 8,000 | |
| Sales | 10,000 | |
| Creditors | 2,000 | |
| Equipment | 14,000 | |
| Total | 37,000 | 37,000 |
Answer
Total debit RM37,000 equals total credit RM37,000. The Trial Balance balances.
Where marks are usually lost
Example 4: Full Trial Balance with expenses and a loan
Question
Solution plan
Expenses (Rent, Salaries) are debit balances, like assets and purchases. A bank loan is a liability with a credit balance. Arrange all debit balances in the debit column and credit balances in the credit column, then total.
| Particulars | Debit (RM) | Credit (RM) |
|---|---|---|
| Capital | 40,000 | |
| Motor vehicle | 20,000 | |
| Cash | 5,000 | |
| Bank | 10,000 | |
| Purchases | 30,000 | |
| Sales | 25,000 | |
| Shop rent | 3,000 | |
| Salaries | 4,000 | |
| Debtors | 8,000 | |
| Creditors | 6,000 | |
| Bank loan | 9,000 | |
| Total | 80,000 | 80,000 |
Answer
Total debit RM80,000 equals total credit RM80,000. The Trial Balance balances.
Where marks are usually lost
Example 5: Determining and recording closing inventory
Question
Solution plan
Inventory is goods bought for resale. Units remaining = 20 + 100 - 70 = 50 units. Value = 50 x RM100 = RM5,000. Record: Debit Closing Inventory account, Credit Trading account. Closing inventory becomes an asset (debit balance b/d).
| Date | Particulars | Received (units) | Issued (units) | Balance (units) |
|---|---|---|---|---|
| 1 Jan | Opening balance | 20 | ||
| 5 Mar | Purchases | 100 | 120 | |
| 20 Aug | Sales | 70 | 50 | |
| 31 Dec | Closing inventory (50 x RM100) | 50 |
| Particulars | Debit (RM) | Credit (RM) |
|---|---|---|
| Closing Inventory | 5,000 | |
| Trading Account | 5,000 | |
| (Recording closing inventory on 31 Dec 2025) | ||
| Total | 5,000 | 5,000 |
| Date | Particulars | RM | Date | Particulars | RM |
|---|---|---|---|---|---|
| 31 Dec | Trading Account | 5,000 | 31 Dec | Balance c/d | 5,000 |
| 5,000 | 5,000 | ||||
| 1 Jan | Balance b/d | 5,000 |
Answer
Closing inventory is 50 units worth RM5,000. The entry is: Debit Closing Inventory RM5,000, Credit Trading Account RM5,000. The Closing Inventory Account has a debit balance b/d of RM5,000 as an asset.
Where marks are usually lost
Example 6: Link between the Trial Balance, closing inventory and financial statements
Question
Solution plan
Opening inventory and Purchases appear in the Trial Balance; closing inventory does not, and is given as additional information. Cost of sales = Opening inventory + Purchases - Closing inventory = 4,000 + 20,000 - 6,000 = 18,000. Gross profit = Sales - Cost of sales = 35,000 - 18,000 = 17,000. Closing inventory RM6,000 is reported as a current asset.
| Particulars | RM | RM |
|---|---|---|
| Sales | 35,000 | |
| Less: Cost of sales | ||
| Opening inventory | 4,000 | |
| Add: Purchases | 20,000 | |
| Cost of goods available for sale | 24,000 | |
| Less: Closing inventory | 6,000 | |
| Cost of sales | 18,000 | |
| Gross profit | 17,000 |
| Particulars | RM |
|---|---|
| Current assets | |
| Closing inventory | 6,000 |
Answer
Cost of sales is RM18,000 and gross profit is RM17,000. Closing inventory RM6,000 plays two roles: as a deduction in cost of sales (Income Statement) and as a current asset (Statement of Financial Position).