4 The following balances were extracted from the books of Sarrah Traders on 30 April 2020:



Sales revenue

165 000

Cost of sales

122 900

Shop fixtures and fittings

9 250

Cash at bank

1 300


20 000  


23 200

Trade payables

10 920

Trade receivables

25 100

Insurance expense

4 940

Rental income

12 800

Wages and salary expense

20 080


1 950

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.


a. What is a Trial Balance?


b. Explain two purposes of the Trial Balance.


c. Prepare the trial balance as at 30 April 2020 after taking into account the transactions on 30 April 2020.


[TOTAL 12]

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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)

  1.   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.