Example :

Eric commenced business as a dealer selling stationery. The following transactions took
place during the month of February 2005:
Feb !ommenced business with cash in hand "#000 and cash at bank "#5 000.
$ %urchased goods by che&ue "# 5000
5 !ash sales "# 500
' %urchased goods on credit from !han (rothers "# $500
0 )old goods on credit to * +ay "#,50
2 "eturned goods to !han (rothers as goods supplied were of different
specifications "# 50
$ * +ay returned defecti-e goods "# 00
5 %aid wages in cash "# '50
. %aid !han (rothers by che&ue "# 000
' "ecei-ed che&ue from * +ay "# /00
/ !ash )ales "# 2000
20 0ithdrew cash from bank for personal use "# 50
2, (ought furniture by che&ue "# $50
2' %aid wages in cash "# '50
2/ Transferred cash into bank account "# 2200
%aid !han (rothers che&ue "# 000 and recei-ed discount of "#50
"e&uired : 1i2 "ecord the abo-e transactions in the appropriate ledger accounts
1ii2 %repare the trial balance for Eric as at 2/ Feb 2005.
.
3nswer :
Bank Account
RM RM
2005 2005
Feb
1 Capital 15000 Feb 3 Purchases 5000
17 O Kay 800 16 Chan Brthers 1000
28 Cash 2200 20 !ra"in#s 50
2$ Furniture 1350
28 Chan Brthers 1000
Balance c%& '600
18000 18000

Mac
1 Balance b%& '600

Capital account
RM RM
2005 2005
Feb 1 Cash 1000
Feb 28 Balance c%& 16000 Ban( 15000


16000 16000

Mar 1 Balance b%& 16000

Cash Account
RM RM
2005 2006
Feb
1 Capital 1000 Feb 1 )a#es 750
5 *ales 1500 27 )a#es 750
18 *ales 2000 28 Ban( 2200
Balance c%& 800

$500 $500

Mac
1 Balance b%& 800

Chan Brothers Account
RM RM
2005 2006
Feb
12 Purchases returns 150 Feb 7 Purchases 3500
16 Ban( 1000
28 Ban( 1000
!iscunts recei+e& 50
Balance c%& 1300
3500 3500

Mac 1 Balance b%& 1300

O Kay Account
RM RM
2005 2006
Feb
10 *ales 1$50 Feb 13 *ales returns 100
17 Ban( 800
Balance c%& 550

1$50 1$50

Mac 1 Balance b%& 550
Sales Account
RM RM
2005 2005
Feb
28 ,ra&in# -ccunt $'50 Feb 5 Cash 1500
10 O Kay 1$50
18 Cash 2000

$'50 $'50


Sales Returns Account
RM RM
2005 2005
Feb
13 O Kay 100
Feb
28
Pr.it / 0ss
-ccunt 100

100 100
Purchases Account
RM RM
2005 2005
Feb 3 Ban( 5000 Feb 26 !ra"in#s 50
7 Chan Brthers 3500 28
Pr.it / 0ss
-ccunt 8$50


8500 8500

Purchases Returns Account
RM RM
2005 2005
Feb 28 Pr.it / 0ss -ccunt 150 Feb 12 Chan Brthers 150

150 150
Wages Account
RM RM
2005 2005
Feb
15 Cash 750 Feb 28
Pr.it / 0ss
-ccunt 1$00
27 Cash 750
1$00 1$00

Discount Received Account
RM RM
2005 2005
Feb 28 Pr.it / 0ss -ccunt 50 Feb 28 Chan Brthers 50

50 50

Drawings Account
RM RM
2005 2005
Feb
20 Ban( 50 Feb 28 Balance c%& 50


50 50
Mac
1 Balance c%& 50
Furniture Account
RM RM
2005 2005
Feb
2$ Ban( 1350 Feb 28 Balance c%& 1350


1350 1350
Mac 1 Balance b%& 1350
R!C
"rial Balance as at #$ Fe%ruary #&&'
De%it Credit
R( R(
Furniture 1350
Cash 800
Ban( '600
!ebtr 1 O Kay 550
Cre&itr 1 Chan Br 1300
Capital 16000
!ra"in#s 50
Purchases 8500
Purchases Returns 150
)a#es 1500
*ales $'50
*ales Returns 100
!iscunt Recei+e& 50
22$50 22$50
0hen drawing up a Trial (alance 4 special attention should be gi-en to the following :
1a2 The business name is written at the top
1b2 The date has to be stated after the heading 5Trial (alance as at 67. 8t is important
since the balances shown are only true at that point in time.
1c2 3ccounts without any balance need not be shown in the Trial (alance.
.
9:E)T8*; 3;)0E"
. !ash sales of "# $,5 was entered correctly in the
debit side of the !ash 3ccount but was posted to the
credit side of the )ales 3ccount as "# $5,.
Correct Entries With
Different Amounts
2. !ash "#000 paid to <oodman was credited to the
!ash account and credited again to the account of
<oodman.
$.The total debits of the Trial (alance is o-erstated4 thus
causing the debits to exceed the credits.
,. !redit purchases of "# 500 from 3(! =td. was
debited to the %urchases account only.
2. !>E!+ )%*T
9:E)T8*; 3;)0E"
. 3 cash purchase of "# 00 was not recorded at all. (a) Errors of Omission.
2. The wages account was credited and the !ash account
debited when payment was made for wages.
$. )ales of "#000 was recorded as "# 00 in the
sales ?ournal and the wrong amount was posted to the
)ales 3ccount and @ebtors 3ccount in the =edger.
,. %ayment of a "# 500 che&ue to 8 * Aou was debited
instead to the account A * #e.
5. %urchases of furniture are to be entered in the
Furniture 3ccount but are instead treated as expense
items and entered in the %urchase 3ccount.
.. The %urchases 3ccount and )ales 3ccount are both
o-erstated by "#000.00