S3U

Math / Money and accounting / Grade 8 / mb8t2

Trial Balance Detective - Practice 2

Separate equipment, an expense owed and an earned sale, then challenge a balanced but wrong entry.

All worksheets

Watch the lesson | Review the first trial balance case

5 questions0m 0s
Learn the skill

An equipment purchase exchanges assets when paid in cash; it is not an immediate expense in this model. A service consumed now is an expense even if its bill is paid later: debit Expense and credit Accounts Payable. Paying that bill reduces the payable, not profit a second time. Before closing, list ending debit and credit balances once in a trial balance. Matching totals cannot detect every wrong account.

Worked example

Separate example: owner adds 70 cash, service earned on account is 18, collection is 6 and a current expense costs 4 cash. Debit balances: Cash 72, Receivable 12, Expense 4. Credit balances: Capital 70, Revenue 18. Each column totals 88. Profit = 18 - 4 = 14. Capital and revenue are both credits but mean different things.

Separate worked trial balance has debits Cash 72, Receivable 12 and Expense 4; credits Capital 70 and Revenue 18. Both sides total 88. Cash and profit answer different questions.
A balanced record still needs the correct accounts and supporting transaction evidence.

Workshop records to review

Start with zero balances. U1: owner contributes 150 cash. U2: buy equipment for 40 cash, recorded as an asset. U3: finish a service and receive 30 cash immediately. U4: receive a bill for 12 of electricity consumed this period, due later. U5: pay 5 toward that bill. Use fictional dollars, accrual accounting and pre-closing balances. No other transactions, taxes, depreciation, fees or adjustments apply.

Question 1 After U5, what is the Cash balance in dollars?
Question 2 After U5, how many dollars remain in Accounts Payable?
Question 3 What is this period's profit in dollars?
Question 4 What is the total of EACH trial balance column?
Question 5 Suppose U3 credited Capital 30 instead of Revenue 30. What would happen?