Neena (Accountant) (60 Points)
22 May 2010will cash in hand comes in the trial balance incase of a newly established business, i prepared a cash account which has cash in hand (Rs.100000)in the debit side & Buildingmaintenamce(15000), Internet charges(Rs.29760), Stamps & Sela(Rs.1500), Electricity Rs.3830 on the Credit side, so the credit balance comes to Rs. 49910, also the bank account gives a Credit balance of Rs. 16000, so wat items r to be included in the trial balnce & how.
ramajayam
(ARTILCE)
(144 Points)
Replied 22 May 2010
mr neena,
All ledger accounts which shows any balance whether credit of debit will come in the trial balance.
so every thing should be included
and one important note the said accounts like building maint, internet charges and electricity will show only debit balance please see it .....
ramajayam
(ARTILCE)
(144 Points)
Replied 22 May 2010
coz
when u spend for any expenses the entry is
expenses a/c dr
to cash or bank a/c
since u always debit all the expenses a/c it will always shows a debit balance only
Neena
(Accountant)
(60 Points)
Replied 22 May 2010
cash a/c has a debit balance of rs.49910(the debit side exceeds credit side), bank a/c shows debit balance of rs.16000(i mean rs.16000 lies with bank), i have attached a copy of wat i have prepared, pls advice me firther
Hw is it possible dat cash account shows a credit balance...
If i will interpret this thing as.......:I have done a cash expenses more than the amount m having in mah hand..
Neena first of all ur posting to account is wrong i think..
But ya it is quiet possible that bank can show a cr balance ie overdraft account which shud b appear in the cr side of trial balance
Regards
Vishal malhotra
Neena
(Accountant)
(60 Points)
Replied 22 May 2010
thanks Vishal, sorry about the first posting, wat is the treatment of cash in hand in trial balance, i mean i an getting debit balances in cash (rs.49910)as well as bank accounts(160000).
Mukesh Goel
(CA,CFA)
(103 Points)
Replied 22 May 2010
Hi Neena
I think ur are confused
please explain your senerio
How comes the customer has 160000 without any sales .
Please provide all information
CA Manjith
(Senior Associate)
(154 Points)
Replied 22 May 2010
u jus check the first entry in cash A/c
cash A/c Dr 100000
To Cash in Hand Cr 100000
i hopes that u mistakely credited cash in hand a/c instead of capital A/c. if that is the case Capital A/c shld be credited instead of that cash in hand A/c
then capital A/c will come to trial balance as a credit balance item. N then ur trial balance is tallied
u jus gt wrong with that first entry thats all :-)
M.M.SURANA
(Director -Taxation )
(532 Points)
Replied 29 May 2010
Dear Neena
We used to prepare TB to see the correctness of ledger a/cs . All the Debit or Credit balance wil appear in Trial Balance. only closing stock will not form the part of TB. All the ledger Debit balances eg. cash, bank, Exps. Receivables, Advances & Deposit Given etc. will appear on Debit Side and all credit ballances e.g. Bank overdraft , Loans taken, Payables etc. will appear on credit side of TB. In ur. case U hav to tale all exps. and cash balance of Rs. 49910 on Debit side and Bank Credit means ex. of ches issues. shoul come on credit side beside capital investment ans others. U have to keep in mind both side should tally, if not than there may mistakes in postings
Surana, Chennai
09952967237
work is worship
(Service)
(2728 Points)
Replied 30 May 2010
Hi Neena Firstly you have not shown from whom cash received. The first entry should be
Debit Cash 100,000.00
Credit Capital 100,000.00
and the credit balance in capital a/c will reflect in credit side of Trial Balance.
Secondly, since no sales has taken place yet, the amount received from Debtor AED 160,000/- should be shown as Advance against sales. and will appear in the debit side of Trial Balance.
Thirdly, the cash and bank are showing debit balance which is correct.
Now if yu chck your Trial balance will tally as it had a difference of 100,000/-
work is worship
(Service)
(2728 Points)
Replied 30 May 2010
Hi Neena Firstly you have not shown from whom cash received. The first entry should be
Debit Cash 100,000.00
Credit Capital 100,000.00
and the credit balance in capital a/c will reflect in credit side of Trial Balance.
Secondly, since no sales has taken place yet, the amount received from Debtor AED 160,000/- should be shown as Advance against sales. and will appear in the debit side of Trial Balance.
Thirdly, the cash and bank are showing debit balance which is correct.
Now if yu chck your Trial balance will tally as it had a difference of 100,000/-
CAclubindia
