Corporate Fin Mgt NDLM.PDF

Visual Aid -5: Trial Balance

Trial Balance

ó Balances method

ó Debit Balance

ó Credit Balance

ó Capital Account

ó Debtors

ó Creditors

ó Errors

7.4. While explaining Trial Balance, faculty should explain (a) the meaning of

balances on accounts, (b) why Trial Balances must be prepared, before

finalizing Accounts. This should preferably be shown with a concrete

example, which indicates why and how a Trial Balance always tallies. (c)

Why certain accounts always show debit balances and other accounts

always show credit balances.

Visual Aid 6 : Trading Account

Trading Account

ó Opening Stock

ó Purchases
Less: returns

ó Freight duty etc.

ó Carriage Inwards

ó Gross Profit Transferred
to P & L Account

Rs.

ó Sales

Less: returns

ó Closing Stock

Rs.

Total Rs.
Total Rs.

7.5. Faculty to explain :-

• The meaning of trading expenses


• Stock Accounts


• Direct Charges