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Before the preparation of Trial balance, all ledgers should be posted, added and balance off. In balancing the accounts, the following procedures should be followed:

(i) Post all debit items

(ii) Add all the items on the debit side

(iii) Post all credit items

(iv) Add all the items on the Credit side

(v) Compare the two sides

(vi) If the debit side is greater, insert the difference on the credit side.

(vii) If the credit side is greater, insert the difference on the debit side.

Illustration

Mr. Ojola has the following transactions for the month of June 1999.

Cash purchases

3,000

Cash Sales

10,000

Paid wages by cash

200

Paid Insurance by cash

800

Settled Olu by cash

300

You are required to record the transaction, balance off and prepare a Trial Balance.

Solution

Screen Shot 2020 12 28 at 1.23.18 PM

Ledger Entries

Screen Shot 2020 12 28 at 1.24.15 PM
Screen Shot 2020 12 28 at 1.24.38 PM
Screen Shot 2020 12 28 at 1.24.53 PM
Screen Shot 2020 12 28 at 1.25.19 PM
Screen Shot 2020 12 28 at 1.35.12 PM
Screen Shot 2020 12 28 at 1.26.47 PM

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