Trial balance: practice questions

How to approach these questions

A trial balance question tests whether you know which side each account normally sits on. Recall the rule and do not guess item by item. Assets and expenses are debit balances.

Liabilities, capital and income are credit balances. Set out three columns: account name, debit and credit. Give it a full heading such as "Trial Balance as at 31 December".

The date matters because a trial balance is a snapshot at one moment. The income statement covers a period. A tidy, correctly titled layout collects presentation marks.

Work down the balances one at a time and decide each side deliberately. Say the account's nature to yourself. "Machinery is an asset, so debit."

"Bank loan is a liability, so credit." "Sales is income, so credit." "Rent paid is an expense, so debit."

The awkward items are the ones students place on reflex. Drawings is a debit, even though it reduces capital. Returns inwards is a debit and returns outwards is a credit, which is the reverse of what the words suggest.

Carriage inwards and outwards are both debits, because both are costs. Discount allowed is a debit expense and discount received is a credit income.

The allowance for doubtful debts looks as if it should reduce an asset. In the trial balance it is a credit balance of its own, and trade receivables appear separately as a debit. In the same way, provision for depreciation (accumulated depreciation) is a credit balance, while the non-current asset is shown at cost as a debit.

Do not net them off. The trial balance shows gross figures side by side. Bank can be on either side.

A positive balance is a debit asset and an overdraft is a credit liability. Cash is almost always a debit.

When every item is placed, total both columns. If they agree, write the equal totals at the foot with a double underline. If they do not, do not force it.

Check the difference for a familiar pattern. A difference that divides exactly by two often means one item is on the wrong side. Halve the difference and look for an amount of that size.

A difference divisible by nine can signal a transposition, such as RM540 entered as RM450. A round difference such as RM100 or RM1,000 hints at an addition slip in one column. Checking systematically beats re-adding everything in a panic.

Know what a balanced trial balance does and does not prove. Equal totals show that debits equal credits. They do not prove the books are error-free.

These six errors do not affect the balance. An error of omission is a transaction left out entirely. An error of commission is the right amount posted to the wrong account of the same type.

An error of principle treats a non-current asset as an expense. A complete reversal puts the debit and credit the wrong way round. An error of original entry uses the wrong figure on both sides.

Compensating errors cancel each other out. Questions often ask which type a trial balance cannot reveal, so learn all six with a one-line example each.

Finally, re-read the requirement. Some questions include a "suspense" item and ask you to complete the trial balance or correct errors through a suspense account. Others ask you to prepare the trial balance and then extract the profit.

Show any suspense figure in the column that makes the totals agree, and explain that it is a temporary figure until the error is found. Never change a real figure to make the columns fit. Examiners can see it.

If trial balances and error types still feel like a lot to memorise, we can help. One of our teachers can drill the debit and credit rule with you until it is automatic. Book a trial class