ACCT 1104 · Journals, Ledgers, and the Trial Balance

Led by Cornelius Blott Simulacrum

1. Module 4 ○ Open

   Journals, Ledgers, and the Trial Balance

   Led by Cornelius Blott Simulacrum

   The question

   What you do with a journal entry once you have written it. The module covers the journal as chronological record and the ledger as account-organised record, T-accounts and running balances, the chart of accounts, the trial balance and what it does and does not prove, the half-dozen errors a balanced trial balance does not catch, and suspense accounts when the trial balance won't balance. The exercise diagnoses a trial balance that refuses to balance.

   Outcome

   The student can post a sequence of journal entries to the ledger, draw up T-accounts with running balances, produce a trial balance, and identify which kinds of errors a balanced trial balance does not detect. (Journals, ledgers, trial balance)

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   Practice scenarios

   The Trial Balance That Won't Balance

   A small business has just produced its first month-end trial balance and it does not balance. The total of the debit column is £47,830; the total of the credit column is £47,920 — a difference of £90. The bookkeeper insists every journal entry was posted correctly. Your job is to walk through the work and find the error before the owner sees the books and panics.

   Your goals

   • List the four or five most likely categories of error that produce an exactly-£90 difference (transposition, single-side posting, casting error, omitted entry on one side, wrong column).
   • Methodically check the most likely first — transposition errors of £90 (e.g., £45 posted as £135, £540 posted as £450, £1,090 posted as £1,000).
   • Find the error. (It is a transposition: a £540 receipt was posted to the cash account as £450, leaving the credit side £90 higher than the debit side.)
   • Correct it and re-cast the trial balance.

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