CBSE Class 11 Accountancy Revision Notes Chapter-6 – Trial Balance and Rectification of Errors
Chapter 6 of class 11, Trial Balance and Rectification of Errors, is an exciting and significant chapter for commerce students. This chapter holds great importance due to its usage in banking and businesses where people are required to maintain efficient business transaction accounts.
The Revision Notes for this chapter are available on the Extramarks website. The notes cover all the important topics covered in Chapter 6 of Class 11 Accountancy – Trial Balance and Rectification of Errors – in a clear and concise manner. Students can refer to these notes to prepare for this chapter more effectively and for quick last-minute revisions before their exams.
Revision Notes for CBSE Class 11 Accountancy Chapter 6 – Download
Access Class- 11 Accountancy Chapter 6 – Trial Balance and Rectification of Errors
The class 11 Accountancy notes are prepared by experienced teachers and educators who have expertise in the subject. These notes help students clear their concepts for different topics and thoroughly understand the chapter. These notes also help students to adequately prepare for their exams.
Definition:
A trial balance is a statement showing balances, credit, and debit totals of the ledger account to offer accuracy. It offers proof of accounting accuracy of recording the transactions, but it is not a wise decision to rely on the trial balances because sometimes there may be errors due to complete omissions and more mistakes. It is, however, a crucial statement in accounting since it showcases the final position of all the accounts, thus helping in preparing the final statement.
Objectives of Preparing Trial Balance:
- To achieve arithmetical accuracy of all the ledger accounts
- For locating errors while recording the transactions
- To help in the preparation of the final statements of the firm
- To check and evaluate if the final debits are the same as the final credits
Limitation of the Trial Balance:
Trial balances cannot be considered 100% accurate as these do not find and evaluate all the varieties of errors. Some errors that cannot be found with trial balances include:
- Posting the same entries two times by mistake
- When the amount is correct, the posting is made in the wrong account
- When both accounts have wrong amounts entered
- When a transaction is completely missed or left out and not entered in any of the journals
Preparation of Trial Balance:
At the end of any accounting year, trial balances are prepared. However, firms can prepare these at the end of different periods to ensure the accuracy of the accounts.
| Particulars |
L.F. |
Amount (Dr.) |
Amount (Cr.) |
| Capital
Land and Building
Plant and Machinery
Equipment
Furniture and Fixtures
Cash in Hand
Cash at Bank
Debtors
Bills Receivable
Stock of Raw Materials
Work in Progress
Stock of Finished Goods
Prepared insurance
Purchases
Carriage Inwards
Carriage Outwards
Sales
Sales Return
Purchase Return
Interest Paid
Commission/Discount Received
Salaries
Long Term Loan
Bills Payable
Creditors
Outstanding Salaries
Outstanding Interest Earned
Advances from Customers
Drawings
Reserve Fund
Provision of Doubtful Debts |
|
———-
———-
———-
———–
———–
———–
———-
———–
———–
———– |
———
——–
———
———
———-
———- |
| Total |
|
XXXXXXX |
XXXXXXX |
Rectification of Errors:
There are two types of errors:
- Errors that don’t affect the trial balance
- Errors that affect the trial balance
Errors that Do Not Affect the Trial Balance:
These are the errors committed in 2 or more accounts and thus don’t affect the balances in the trial balance. A rectifying journal entry is passed to rectify these errors. These are the types of errors that do not affect trial balance:
- Omission errors: If a transaction is omitted or missed from being recorded in the account books, such error is called an error of omission.
- Compensating errors: These are the errors when the net effects of two or more errors result in nil.
- Errors of Principle: If any accounting principle is violated while recording the transactions, such errors do not affect the trial balance.
- Incorrect Account in the Original Book: If a wrong account is being maintained in the original book.
- Posting to the Wrong Account: If a transaction is supposed to be posted in the purchase account but is posted in the sales account.
Errors that Affect the Trial Balance:
These are the mistakes or errors occurring in just a single account and need to be rectified by opening the Suspense Account. These are of the following types:
- Error of Omission: This error occurs when an entry is not entered in only one account resulting in overcosting or undercosting of the account.
- Error of Commissions: These errors occur when any mistake is made while doing additions, subtractions, or totalling the ledger account.
- Wrong Posting: There may be instances when an incorrect amount is posted, or posting is made on the wrong side of the ledger account.
Illustration: 1
Trial Balance of ABC Ltd. doesn’t match. It showed an excess credit of Rs. 20,000. They put the difference to a suspense account. The errors that they located were:
(i) Sales return book overcast by Rs. 2,000.
(ii) Purchases book was undercast by Rs. 1200.
(iii) In the sales book total of page no. 4 was carried forward to page 5 as Rs. 2,000 instead of Rs. 2,400 and the total of page 8 were carried forward to page 9 as Rs. 11,200 instead of Rs. 10,000.
(iv) Goods returned to Ram Rs. 2,000 were recorded through the sales book.
(v) Credit purchases from M & Co. Rs. 16,000 were recorded through sales books.
(vi) Credit purchases from S & Co. Rs. 10,000 were recorded through sales books. However, S & Co. were correctly credited.
(vii) Salary paid Rs. 4,000 was debited to the employee’s personal account.
Ans: Rectification entries:
(i) Sales return book overcast by Rs. 2,000.
| Suspense A/c———- Dr.
To Sales Return A/c
(Being Sales returns book overcast by Rs. 2000, now corrected). |
2000 |
2000 |
(ii) Purchases book was undercast by Rs. 1,200.
| Purchase A/c …….. Dr.
To Suspense A/c
(being purchase book undercast by Rs. 1200, now corrected |
1200 |
1200 |
(iii) In the sales book total of page no. 4 was carried forward to page 5 as Rs. 2,000 instead of Rs. 2,400 and the total of page 8 were carried forward to page 9 as Rs. 11,200 instead of Rs. 10,000.
| Sales A/c…… Dr.
To Suspense A/c
(Being error in carry forward of sales book, now corrected) |
800 |
800 |
(iv) Goods returned to Ram Rs. 2,000 were recorded through sales book.
| Sales A/c…… Dr.
To Return Outwards A/c
(Being Return Outwards wrongly recorded through sales book, now rectified) |
2000 |
2000 |
(v) Credit purchases from M & Co. Rs. 16,000 were recorded through sales books.
| Purchase A/c…… Dr.
Sales A/c………Dr.
To M & Co.’s A/c
(Being Credit Purchases wrongly recorded through sales book, now rectified) |
16000
16000 |
32000 |
(vi) Credit purchases from S & Co. Rs. 10,000 were recorded through sales books. However, S & Co. were correctly credited.
| Purchase A/c…… Dr.
Sales A/c………Dr.
To Suspense A/c
(Being Credit Purchases wrongly recorded through sales book, however, suppliers account correctly credited, now rectified) |
10000
10000 |
20000 |
(vii) Salary paid Rs. 4,000 was debited to employee’s personal account.
| Salary A/c…… Dr.
To Employees Personal A/c
(Being salary paid wrongly debited to employee’s personal account, now corrected) |
4000 |
4000 |
Suspense A/c
| Date |
Particulars |
J.F. |
Amount (Dr.) |
Date |
Particulars |
J.F. |
Amount(Cr.) |
|
To Difference as per Trial Balance
To Sales Returns
Total |
|
20000
2000
___________
22000 |
|
By purchases
By sales
By Purchases
By Sales
Total |
|
2300
800
10000
10000
__________
22000 |
CBSE Class 11 Accountancy Revision Notes Chapter 6 Trial Balance and Rectification of Errors
Notes of Class 11 Accountancy Chapter 6 can help students revise the chapter quickly without missing out on any of the details covered in the chapter. These are not only useful for just revision but can help students sort out their queries about different topics of this chapter. The definitions and illustrations provided are accurate and concise, thus making it easier for students to have a summarized and easy-to-understand view of the chapter.
Class 11 Accountancy Chapter 11 Revision Notes
The concept behind rectification of errors is quite simple to understand and implement. Whenever a mistake or error is made by passing any wrong entry, a rectifying entry is passed as soon as the wrongly recorded entry is detected. This rectifying entry nullifies the effect of the error, which is why it is termed rectification of errors.
The role of the Trial Balance is to check wrong entries that are passed before or after the trial balance and ensure that rectifying entries are also passed accordingly.
To have a command of this topic, students must practice the topics and problems provided in the chapter to answer the questions fluently with clear explanations in their exams. The chapter notes that Extramarks provide include the definition, preparation, and objectives of trial balance, the rectification of errors, and similar illustrations.
Key Takeaways of the Revision Notes and a Few Suggestions for the Students
Below mentioned are some important topics revised in these notes of Class 11 Accountancy chapter 6.
- Definition: Students should know the definition of trial balance. They must have a clear idea of its meaning before starting this chapter.
- Preparation: It involves how and when a trial balance is prepared.
- Format of Trial Balance: It lets students understand the format of trial balance.
- Rectification of Errors: Students learn about ratifying the entry and passing the rectified entry.
- Related Illustrations: Illustrations need to be analyzed by the students thoroughly for a clear understanding of the topics.
Why these Revision Notes?
These revision notes are helpful and essential for students of class 11 in a variety of ways:
- The revision notes provided by Extramarks help students revise the important topics of the chapter conveniently
- The notes are available to download on Extramarks at any time free of cost
- Related illustrations are also provided to the students for easy and complete understanding
- The language in the solutions is kept very simple which enables students to grasp the concept without any difficulty
NCERT Solutions Chapter 6 Class 11 Accountancy Revision Notes
Extramarks’ expert educators prepare the Class 11 Accountancy Chapter 6 Notes to facilitate students with an easy-to-understand study material which they can access any time at their convenience