Extended trial balance

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Does anyone know if on the extended trial balance whether the accounts need to be listed in a certain order? also when doing th profit/loss statement, where do you put sales & purchase returns?

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Extended trial balance

    The order is up to you - could be alphabetical to make it easier to find things.

    Sales / purchase returns are posted to the relevant control accounts.

    Scott.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Extended trial balance

    I have mine in the same order that they appear on the P & L and BS. Makes the transfer/checking easier.

    Helen
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Extended trial balance

    I don't believe that there is a set order. It shouldn't impact on you at Intermediate level, although there are formats for the Profit & Loss and Balance sheets. Though for sanity's sake, you may as well use the P&L order.

    For sales returns, the sales figure needs to be reduced by that amount to give actual sales. If you were going to include it, it would be just under sales:

    Sales...............................XX
    .less sales returns......... (X)
    Revised Sales ................. X
    Less cost of sales
    .opening stock.........X
    .purchases..............X
    .purchases returns.(X)
    .closing stock..........(X)
    .cost of sales .................... (X)
    Gross Profit............................X
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Extended trial balance

    There is not a set order to have your accounts in the TB - it just depends on how the business sets up their ledgers.

    Most have a chart of accounts which shows how the accounts map out and they usually use a system where, for example, all sales nominal accounts begin with 1, all expense nominal accounts begin with 2 etc. So the chart of account might look like:

    1 - SALES
    1001 - Sales, jumpers.
    1002 - Sales, trainers.
    1003 - Sales, t-shirts.

    2 - EXPENSES
    2001 - Expenses, heating.
    2002 - Expenses, water.
    2003 - Expenses, rent.

    The business may later on start selling dresses, so they would need a new nominal in the sales group so could pick 1004 and this would come under the 1 - SALES group on the TB.

    Most TB's I have seen are in nominal account order (probably because I have only worked for large companies), but they can be set up to be in whatever order the business decides is easiest for them.

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