2020 SACSS 3N POA EOY P1 Q4

2020 SACSS 3N POA EOY P1 Q4

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

Capital

20 000  

Inventory

23 200

Trade payables

10 920

Trade receivables

25 100

Insurance expense

4 940

Rental income

12 800

Wages and salary expense

20 080

Drawings

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.

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]

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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.

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