Short Notes — Ch 10 Trial Balance
⚡ Ch 10 — Trial Balance
FAA 2022 = the real Finance Account Assistant paper, 6 Mar 2022 — FAA-2022-paper 2024 = the FAA paper of 28 Jan 2024 — 2024-paper PAA 2020 = the Panchayat Accounts Assistant paper of 10 Nov 2020 — a different post, kept as practice, with the official JKSSB key. Its questions were previously mislabelled "2022" and duplicated under two booklet numberings; de-duplicated 1 Sep 2026. See Four-Paper-Comparison.
PYQ: 1 question — 2024·Q50. MCQ bank: 22 questions (Q118–131 · Q322–329). 1 mark most years. Small chapter, and it is the bridge from the ledger to the final accounts — do it before Ch 11–14.
1️⃣ The core
Trial Balance = a statement (not an account) listing the balances of all ledger accounts on a particular date, to check that total debits = total credits.
It is the THIRD phase of the accounting process: Journal → Ledger → TRIAL BALANCE → Final Accounts
⭐ Its purpose is to verify the arithmetical accuracy of the LEDGER — nothing more.
2️⃣ Quick Revision Table
| Point | Answer |
|---|---|
| Trial balance is a | Statement (not an account) |
| It checks the accuracy of the | ⭐ Ledger |
| Prepared | on a particular date (normally year-end) |
| Position in the cycle | after the Ledger, before Final Accounts |
| It contains | ⭐ ALL accounts — personal, real and nominal |
| Difference in totals goes to | ⭐ Suspense Account |
| Credit column short by ₹200 | credit the Suspense A/c by ₹200 |
| Trial balance after adjusting entries | Adjusted Trial Balance |
| Most popular preparation method | ⭐ Balances Method |
| Debtors/creditors shown as | Sundry Debtors / Sundry Creditors |
The 3 objectives
- Arithmetical accuracy of the ledger
- Help in locating errors
- Basis for preparing the financial statements (+ it acts as a summarised ledger)
The 3 methods
| Method | Uses |
|---|---|
| Totals Method | the totals of each ledger side |
| ⭐ Balances Method | the closing balances — most used in practice |
| Totals-cum-Balances | both — 4 amount columns; rarely used |
3️⃣ ⭐ Which side does an item go on?
| DEBIT column | CREDIT column |
|---|---|
| Assets (cash, furniture, debtors, stock) | Liabilities (creditors, bills payable, loans) |
| Expenses & losses (salaries, purchases, rent) | Capital |
| Drawings | Revenue & gains (sales, commission received) |
| Sales Returns (returns inward) | Purchases Returns (returns outward) |
Memory hook: what you own or spend → Debit · what you owe or earn → Credit. ⚠️ Note the returns swap sides — Sales is credit but Sales Returns is debit.
4️⃣ ⚠️ Errors a trial balance CANNOT catch
These errors leave both sides equal:
- Error of complete omission — the transaction never recorded at all
- Error of principle — e.g. machinery purchase debited to Purchases A/c
- Compensating errors — two mistakes cancelling out
- Error of commission — right amount posted to the wrong person's account
A trial balance only proves the arithmetic, not the judgement.
5️⃣ 🎯 PYQ from this chapter
2024 · Q50 — Trial balance helps to check the accuracy of the:
a) Balance sheet b) Ledger c) Journals d) Cash flow statement → Ans: B It verifies ledger posting. Not the balance sheet (that comes later), and not the journal.
⭐ From the REAL FAA 2022 paper (6 Mar 2022) — added 1 Sep 2026. See FAA-2022-paper.
FAA 2022 · Q38 — How frequently is the Trial Balance prepared?
a) quarterly b) during the year c) end of month d) end of financial year → Ans: Null — question dropped ⚠️ A trial balance can be drawn at any interval. No option is correct, so JKSSB awarded it to everyone.
FAA 2022 · Q57 ⭐ (REPEATED verbatim in 2024 · Q50) — Trial balance helps to check the accuracy of the:
a) balance sheet b) ledger c) journals d) cash flow statement → Ans: B It proves the arithmetical accuracy of ledger postings only — not that the entries are right.
6️⃣ High-frequency MCQ traps
| MCQ | Point |
|---|---|
| Q118 | Basic purpose = check arithmetical accuracy, not to find profit |
| Q120 | Correct cycle: Journal → Ledger → Trial Balance → Final Accounts |
| Q121 | After adjustments = Adjusted trial balance |
| Q122 / Q124 | Methods = Total and Balance; Balance method most popular |
| Q128 | Credit column: rent received / sales / capital |
| Q129 | Debit column: salaries / purchases / drawings |
| Q130 | ⭐ Closing stock in the trial balance → affects the Balance Sheet only |
| Q131 | A debit may increase an expense |
| Q322 | After the ledger comes the trial balance |
| Q323 | Contains all accounts |
| Q325 | Short credit column → credited to Suspense A/c |
| Q328 | Difference → Suspense Account |
| Q329 | Prepared on a particular date |
7️⃣ If you remember nothing else
Trial balance = a STATEMENT, on a DATE, checking the arithmetical accuracy of the LEDGER · contains ALL accounts · difference → Suspense A/c · Balances method is most used · it CANNOT catch omission, principle or compensating errors · closing stock in the trial balance → Balance Sheet only
🔗 Related
- Full notes: L-10-TRIAL BALANCE · MCQs Q118–131, Q322–329 in MCQs
- Prev: SN-9-Cash-Book · Next: SN-11-Financial-Statements
