2020 SACSS 3N POA EOY P1 Q4
4 The following balances were extracted from the books of Sarrah Traders on 30 April 2020:
The following transactions took place on 30 April 2020:
1. Sarrah, the business owner, contributed $5000 personal cash into the business bank account.
2. Bought shop fixtures and fittings on credit $2500.
3. Paid insurance expense by cheque $2000.
REQUIRED
a. What is a Trial Balance?
[1]
b. Explain two purposes of the Trial Balance.
[2]
c. Prepare the trial balance as at 30 April 2020 after taking into account the transactions on 30 April 2020.
[9]
[TOTAL 12]
A Trial Balance is a list of ledger accounts and their balances at a
particular date.
Two purposes of a Trial Balance: (any 2 answers)
- To check arithmetical accuracy of the double entry system.
2 To facilitate the preparation of the statement of financial performance
and statement of financial position of the business.
3 To verify that the total of accounts with debit balances equals to total of accounts with credit balances.