GROUPING OF VARIOUS ACCOUNTING TRANSACTIONS - Accounts and Finance for Managers

There are eleven different ledger accounts involved out of the journal entries which already transacted are finally balanced. The balanced ledger accounts should be prepared as a summary list of their balances and names. The total of both balances are equivalent to each other. The major reason for the equivalent balances on both sides is only due to posting of entries to the tune of "Double Entry Accounting Concept (Or) Duality Concept". This is the concept which equates the total amount of resources raised with the total amount of applications of the enterprise.

Purposes of preparing the Trial Balance:

  • To prepare a statement of disclosure of final accounting balances of various ledger accounts on a particular date
  • To prepare a statement of cross checking device of accounting while in the process of posting of entries which mainly on the basis of Double entry accounting principle. It facilitates the accountant to have systematic posting of entries
  • It facilitates the enterprise for the preparation of Trading & Profit and Loss Accounts for the year ended…………….. and the Balance sheet as on dated ………………..
  • It provides the birds' eye view of accounting balances of various ledger accounts during the specified period.

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