Trial balance: Practice Questions

A sole trader is preparing a trial balance. Which of the following items are correctly classified regarding their normal balances?

(i) Returns outwards: Credit balance
(ii) Provision for irrecoverable debts: Debit balance
(iii) Carriage inwards: Debit balance
(iv) Bank overdraft: Debit balance

A bookkeeper accidentally recorded a cash purchase of office equipment for \( \$450 \) as a debit in the repairs account and a credit in the cash account. What is the effect of this error on the trial balance totals?

Which of the following groups of accounts would all normally have a debit balance in a trial balance?

A payment of \( \$150 \) for electricity was correctly entered in the cash book but was debited to the rent account in error. Which type of error is this, and how does it affect the balancing of the trial balance?

Which of the following statements correctly describes the primary purpose of preparing a trial balance?

A bookkeeper has prepared a trial balance that totals \( \$84,500 \) on both the debit and credit sides. However, the following errors were later discovered:

1. A credit sale of \( \$450 \) to J. Wood was recorded in the account of J. Ward.
2. The purchase of a computer for \( \$1,200 \) for office use was entered in the Purchases Account.
3. A payment for electricity, \( \$180 \), was recorded as \( \$810 \) in both the Cash Book and the Electricity Account.
4. A cash sale of \( \$300 \) was completely omitted from the books.

(a) Identify the name of the type of error made in each of the four cases above.
(b) Prepare the journal entries to correct errors 1, 2, and 4 (narratives are not required).
(c) Explain why the trial balance still balanced despite these errors.