can anyone help the foundation fool?

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
foundation level student, already struggling with something!<BR><BR>please confirm wether the following opening balances are Dr or Cr...............I am sure I have this right but my trial balance just wont, well.......balance! and it should (there are no deliberate errors!)<BR><BR>purchases - Dr, <BR>purchase returns - Cr, <BR>purchase control - Cr, <BR>loan - Dr, <BR>disc' rcvd - Cr, <BR>insurance - Dr, <BR>motor tax - Dr, <BR>Vehicles - Dr, <BR>office equiptment - Dr, <BR>stock - Dr, <BR>cash - Dr, <BR>sales control - Dr, <BR>capital - Cr, <BR>sales - Cr, <BR>sales returns - Dr, <BR>disc' all' - Dr, <BR>wages (control I assume) - Dr, <BR>rates - Dr, <BR>heat & light - Dr, <BR>telephone - Dr, <BR>fuel - Dr,<BR>misc' expense - Dr<BR><BR>I know this is a bit low level for most of you but I would really appreciate some help!

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    can anyone help the foundation fool?

    Hi. They all look correct to me. Have you made all the correct postings, e.g. purchase returns to control account, discounts/payments to control accounts?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    can anyone help the foundation fool?

    you may well have hit the nail on the head there scotty! I hadn't posted a payment........lets see if that solves the problem, or if there is a catalogue of mistakes!<BR><BR>thanks scotty!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    can anyone help the foundation fool?

    the loan is a liability so that should have a credit balance unless it is loan interest which would be a debit balance
  • System
    System Posts: 100,534 🤖 Admin 🤖
    can anyone help the foundation fool?

    Best way to think of it is, instead of having that list.<BR><BR>a DR balance is always an asset or expense<BR>a CR balance is always a liability or source if income <BR><BR>Therefore once you have transferred say, your Telephone account (which was a DR balance = expense) to the Profit & Loss account, and you have a credit balance remaining... this means that this appears on the balance sheet (as a liability; eg: accrual)<BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    can anyone help the foundation fool?

    You did a very good job with your trial balance, but as bluewednesday so rightly said, it is the loan which is wrong. Loans are a liability and therefore are credits.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    can anyone help the foundation fool?

    We were taught 'PEARLS'<BR><BR>PEA/RLS (Left hand side debits, right hand side credits)<BR><BR>Purchases<BR>Expenses<BR>Assets<BR><BR>Revenue<BR>Liabilities<BR>Sales
  • System
    System Posts: 100,534 🤖 Admin 🤖
    can anyone help the foundation fool?

    thank you all!<BR><BR>yes, the loan was wrong. as were some calculations!<BR><BR>thanks again guys that clears things up for me.<BR><BR>cheers

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