trial balance help please! (amanda)

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Does any1 (amanada) have any tips on the trial balance? I know what side my sales, purchases, Puchase Control Ac, Sales Control Ac. Drawings and Capital go but what about all the other things like rates, wages, insurance, leasing costs, petty cash, expenses and VAT go!!!!!!!!<BR><BR>How can i remember them?<BR><BR>Thanks<BR><BR>Sarah

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    trial balance help please! (amanda)

    Hi Sarah.<BR><BR>Remember PEARLS - where Purchases, Expenses & Assets are Debits, & Revenue, Liabilitites & Sales are Credits.<BR><BR>Rates are an expense so that's a Debit.<BR><BR>Scott.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    trial balance help please! (amanda)

    The best way to remember things - I find it thinking of the bank account.<BR><BR>The bank account is opposite to your statements - or remember you take money in with your left hand and write your cheques out of the right hand. ie Left Debit is money in - Right credit is money out. I find this is the secreat to all double entry! So if you know what the bank transaction is - you should know the other entry!<BR><BR>So when you pay Insurance to the insurance company - its money out of your bank account - right hand Credit therefore Insurance must be a Debit.<BR>(another way to think of it, Insurance is another purchase - but i different kind, ie insurance and not for re-sale)<BR><BR>Wages - well you are paying out of right hand from the bank - so its a debit to wages!<BR><BR>Petty cash - is the same as your bank - so a petty cash cant go overdrawn - therefore it should / will always have money in!! money in on the left hand - therfore petty cash is a debit.<BR><BR>Vat - is a little different - It can be either! Your TB should let you which side it belongs to! Generally is a Credit balance - as you own this money to HM Customs!!<BR><BR>Does this help or not?<BR><BR>There isnt many Credit balances on a TB - there are mainly debits<BR>PEARLS<BR>Purchases, expenses and assets are DEBITS<BR>Revenue, Liabilities and Sales are CREDITS<BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    trial balance help please! (amanda)

    WOW Thank you!!!! <BR><BR>I'm going to print that off and look at it every hour until i get it into my thick head.<BR><BR>I knew you'd be able to help!<BR><BR><BR>Thanks<BR><BR>x
  • System
    System Posts: 100,534 🤖 Admin 🤖
    trial balance help please! (amanda)

    Therefore would the trial balance list look like this:<BR><BR><b>DR</b> Administration Expenses<BR><b>DR</b> Bad Debts<BR><b>CR</b> Bank<BR><b>DR</b> Business Rates<BR><b>CR</b> Capital<BR><b>DR</b> Fixed Assetts<BR><b>DR</b> Inland Revenue<BR><b>DR</b> Insurance<BR><b>DR</b> Leasing Costs<BR><b>DR</b> Petty Cash<BR><b>DR</b> Purchases<BR><b>CR</b> Purchase Ledger Control Account<BR><b>CR</b> Purchase Returns<BR><b>DR</b> Salaries Expense<BR><b>CR</b> Sales<BR><b>DR</b> Sales and Distribution Expense<BR><b>DR</b> Sales Ledger Control<BR><b>DR</b> Sales Returns<BR><b>DR</b> Stock<BR><b>CR</b> VAT Control (Credit Balance)
  • System
    System Posts: 100,534 🤖 Admin 🤖
    trial balance help please! (amanda)

    Thanks for all your help<BR><BR>I finally cracked it over the bank holiday weekend - i had Inland Revenue as a debit rather than a credit and my bad debt figure was incorrect - ha ha<BR>Just shows you always get there in the end!!!!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    trial balance help please! (amanda)

    Hi<BR>Just remember all expenses are debits such as rent or insurance. VAT can be debit or credit depending on the balancing figure.

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