Question

Part !: Describe the purpose of a Trial Balance and the steps of how to prepare a Trial Balance.

Part 11: What is meant by Footing the Accounts

Answer 1

Part !:

Purpose of the Trial Balance:

Trial Balance is an important part of the accounting cycle. As the name suggest is helps to trial the arithmetical accuracy of the accounting transaction. Generally the nature of the trial balance is to match both the debit and credit side of all the accounts comes from ledgers.

Steps of preparation Trial Balance:

• Trial balance is the third step of the accounting cycle. After journal and ledger.
• First identify the accounts and their balances from the ledger accounts.
• Then posted the same as per their balance. Like all the accounts which have debit balance are put into debit side and the accounts with credit balances put in the credit side of the trial balance. Like all the assets, expenses and losses are comes into the debit side and all the liabilities, incomes and gains are come in the credit side of the trial balance.
• After posted the same the total is done for both the side i.e. debit and credit.
• If the mathematical accuracy is there then both the side of the trial balance i.e. total debit and the total credit side will tally.
• If there is any mismatch i.e. the total of the debit and the credit side of the trial balance is not matched in that case the rectification entries will be done according with the nature of the error.

Part 11:

Footing the Account:

It means make the total of the accounts and tally the same i.e. the total of the balance sheet assets side and the liabilities side will be done and the total of both the side will be same. It represents the final balance after adding all the debit and the credit. At the time of calculating the final balance the Equity Capital is also taking into consideration. It is generally used in the book keeping system to determine the final balances that will put on the financial statement.

References:

Morgan, D., Diamond, D. M., Gottschall, P. E., Ugen, K. E., Dickey, C., Hardy, J., ... & Connor, K. (2000). Aβ peptide vaccination prevents memory loss in an animal model of Alzheimer's disease. Nature, 408(6815), 982.

Varonis, E. M., & Gass, S. (1985). Non-native/non-native conversations: A model for negotiation of meaning. Applied linguistics, 6(1), 71-90.