Commission A/c Total , , - , , , - - , , - , , , - - , , , , , , - , , - , , - - - , , - - , , - - , , , , - - , , , , , , , , , Note: Students will be tested on balance method only . Suspense account Student activity Think: Do you think the trial balance tallies all the time? What should be done when it does not tally? After transferring all the ledger account balances, if the trial balance does not tally, steps must be taken to locate and rectify errors.
If the errors cannot be rectified, then trial balance is tallied by transferring the difference between the total of debit balances and the total of credit balances to a temporary account, called suspense account for timely preparation of the financial statements. If the trial balance shows lesser debit total, suspense account will be debited. Similarly, if the trial balance shows lesser credit total, suspense account will be credited. Later, when errors are located and rectified, the trial balance will get tallied.
Illustration State whether the balance of each of the following accounts should be placed in the debit or the credit column of the trial balance: ) Sundry debtors ) Sundry creditors ) Cash in hand ) Bank overdraft ) Salary ) Discount allowed ) Plant and machinery ) Furniture Solution S.No. Name of account Debit balance Credit balance Sundry debtors Debit Sundry creditors Credit Cash in hand Debit Bank overdraft Credit Salary Debit Discount allowed Debit Plant and machinery Debit Furniture Debit Illustration From the following balances extracted from the books of Raju a trader on automobiles, prepare trial balance as on st March, : Accountancy - Cash in hand , Direct expenses , Discount received Carriage outwards , Creditors , Capital , Buildings , Purchases , Opening stock , Sales , Solution In the books of Raju Trial balance as on 31st March, S. No