Trial Balance: ISC Class 11 Accounts Notes and Solved Problems

What Trial Balance is about

Weightage: Trial Balance belongs to the unit Journal, Ledger and Trial Balance, which CISCE weights at 12 of the 80 marks in the ISC Class XI Accountancy Paper I (Theory). Class XI is examined by the school, so your school sets the paper within this weightage.Source: CISCE ISC Accountancy syllabus, examination year 2028, Class XI unit weightage

Key concepts

Meaning and objectives of a trial balance

A trial balance is a statement (not an account) of the debit and credit balances (or totals) of all ledger accounts, including the cash and bank balances from the cash book, prepared on a particular date.

Objectives:

• To check the arithmetical accuracy of journalising, posting and balancing: debit total = credit total.
• To get a summary of all ledger balances in one place.
• To serve as the basis for final accounts.
• To help locate errors when the totals disagree.

Format (balance method)

S. No.	Name of account	L.F.	Debit balance (₹)	Credit balance (₹)
	Total

It is headed 'Trial Balance of ... as at 31st March 2026'. The word 'as at' is used because it shows balances on one date, not over a period.

Worked example

Why is a trial balance called a 'statement' and not an 'account', and why is it headed 'as at' a date? [2 marks]

Try it first, then show the solutionSolution

1. It is only a list of balances taken from the ledger; nothing is posted to or from it and it has no 'To' or 'By' entries, so it is a statement.
2. It shows the position of balances on one particular day, not transactions over a period, so it is 'as at' that date.

Answer: It is a list prepared from the ledger, not part of double entry (statement); it shows balances on one date ('as at').

Methods of preparation; the balance method

• Total (gross) method: the total of each side of every account is listed. Rarely used.
• Balance (net) method: only the balance of each account is listed, in the debit or credit column. This is the method in the ISC syllabus.
• Compound method: combination of both.

Steps (balance method):

1. Balance every ledger account (and take the cash and bank balances from the cash book).
2. Write each debit balance in the debit column and each credit balance in the credit column.
3. Accounts with nil balance are left out.
4. Total both columns. If they agree, the books are arithmetically accurate (subject to the limitations).

When the question gives a list of balances without sides, you must decide the side for each from the nature of the account.

Worked example

Suppose an account shows debits of ₹48,000 and credits of ₹48,000. How does it appear under the balance method, and under the total method? [1 mark]

Try it first, then show the solutionSolution

1. Balance method: nil balance, so it is omitted.
2. Total method: ₹48,000 in each column.

Answer: Omitted under the balance method; ₹48,000 on both sides under the total method.

Which side? Rules for placing balances

Debit balances (assets, expenses, losses, drawings):

• Assets: cash, bank (favourable), debtors, bills receivable, stock (opening), land, building, machinery, furniture, investments, goodwill, prepaid expenses, accrued income.
• Expenses and losses: purchases, sales returns (returns inward), wages, carriage inwards and outwards, salaries, rent paid, insurance, discount allowed, bad debts, depreciation, interest paid, commission paid, loss by fire.
• Drawings.

Credit balances (liabilities, capital, incomes, gains, provisions):

• Capital; loans; creditors; bills payable; bank overdraft; outstanding expenses; income received in advance.
• Sales; purchases returns (returns outward); discount received; commission, rent and interest received; bad debts recovered.
• Provision for doubtful debts, provision for depreciation, reserves.

The opening stock is a debit balance; closing stock normally does not appear in the trial balance because it is found after the books are closed. It appears in the trial balance only when purchases have already been adjusted for it ('adjusted purchases'), in which case the closing stock is shown as a debit and opening stock is absent.

Worked example

State the side of: (i) Returns outward, (ii) Provision for doubtful debts, (iii) Bad debts recovered, (iv) Carriage outwards. [2 marks]

Try it first, then show the solutionSolution

1. (i) Returns outward reduce purchases: credit.
2. (ii) Provision for doubtful debts is a provision (liability-like): credit.
3. (iii) Bad debts recovered is an income: credit. (iv) Carriage outwards is an expense: debit.

Answer: (i) Credit; (ii) credit; (iii) credit; (iv) debit.

Advantages and limitations

Advantages:

• Checks the arithmetical accuracy of posting and balancing.
• Gives a summary of the ledger on one page.
• Basis for preparing the Trading and Profit and Loss Account and the Balance Sheet.
• Helps detect certain errors (one-sided posting, wrong totalling, wrong balancing, posting to the wrong side, omission of a balance).

Limitations: agreement of the trial balance is not conclusive proof of accuracy, because these errors do not affect it:

1. Errors of complete omission: a transaction not recorded at all.
2. Errors of principle: e.g. purchase of machinery debited to Purchases A/c.
3. Compensating errors: an excess debit in one account offset by an equal excess credit in another account (or by an equal short debit elsewhere).
4. Errors of commission that do not affect totals: posting to the wrong account on the correct side (e.g. Raman's account instead of Ramesh's).
5. Recording a wrong amount in the original book: both sides carry the wrong figure.
6. Complete reversal of entry: debit and credit accounts interchanged.

Also, a trial balance is possible only where the double entry system is followed.

Worked example

Suppose a credit sale of ₹7,500 to Kiran was entered in the sales book as ₹5,700 and posted from there. Will the trial balance agree? Explain. [2 marks]

Try it first, then show the solutionSolution

1. The wrong amount was in the book of original entry, so both Kiran's account (debit) and Sales (credit) carry ₹5,700.
2. Debits and credits remain equal, so the trial balance agrees despite the error.

Answer: Yes, it agrees: an error in the original book affects both sides equally, so it is not revealed.

When the trial balance does not agree: locating errors and suspense account

If the totals differ, check in this order:

1. Re-add the trial balance columns.
2. Check that every ledger balance (including cash and bank) has been listed, on the correct side.
3. If the difference is divisible by 2, look for an amount of half the difference posted on the wrong side.
4. If the difference is divisible by 9, look for a transposition (₹54 written as ₹45) or slide (₹500 as ₹50).
5. Re-check the balancing of each account, then the posting of totals from subsidiary books.
6. Finally check individual postings.

If the difference cannot be found and the final accounts must be prepared, it is put in a temporary Suspense A/c (on the shorter side), to be cleared when the errors are found (studied in Rectification of Errors).

Worked example

Suppose a trial balance's debit total exceeds the credit total by ₹1,800. One explanation is that discount received of ₹900 was placed on the debit side. Verify. [2 marks]

Try it first, then show the solutionSolution

1. Discount received belongs on the credit side. Placing ₹900 on the debit side raises the debit total by 900 and lowers the credit total by 900.
2. Difference = 900 × 2 = ₹1,800, which matches.

Answer: Yes: an item on the wrong side creates a difference of twice its amount, 2 × 900 = ₹1,800.

Finding a missing figure (usually capital)

When one balance (often capital) is not given, it is the balancing figure:

Capital = Total of debit balances − Total of other credit balances.

This works because a correct trial balance must agree. The same idea finds any one missing balance, such as the cash balance or opening stock, if all others are given.

Worked example

Suppose the debit balances of a trader total ₹7,84,250 and the credit balances other than capital total ₹5,26,750. Find the capital. [1 mark]

Try it first, then show the solutionSolution

1. Capital = 7,84,250 − 5,26,750 = ₹2,57,500.

Answer: Capital ₹2,57,500 (credit).

Trial Balance in real life

Each concept, met in an everyday situation. Read the situation, answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

Topics in this chapter

• Locating Errors When the Trial Balance Does Not Agree
• Preparing a Trial Balance: Rules for Placing Balances and Finding Capital

Trial Balance: key facts

Agreement of trial balance

Total of debit balances = Total of credit balances

Missing capital

Capital = Total debit balances − Other credit balances

Item on the wrong side

Difference in totals = 2 × Amount placed on the wrong side

Transposition test

Difference divisible by 9 → suspect transposed or slid figures

Trial Balance: diagrams to practise

Practise each one on paper: draw it from the checklist, then tick off every label.

How the school exam asks Trial Balance

The question patterns to expect, and the method that works for each.

Tricks to remember Trial Balance

Short memory aids. Say each one aloud once, then use it on a question the same day.

• DEAD CLIC

  Debit: Drawings, Expenses, Assets, Debtors. Credit: Capital, Liabilities, Income, Creditors.

  Use it when: Placing every balance.

• Returns follow their partner's opposite

  Sales are credit, so sales returns are debit; purchases are debit, so purchases returns are credit.

  Use it when: Returns inward and outward.

• Six errors that hide: 'O P C C W R'

  Omission, Principle, Compensating, Commission (wrong account, right side), Wrong amount in the original book, Reversal.

  Use it when: Limitations of a trial balance.

Trial Balance: exam-level solved questions

Ordered from exam level to HOTS. Cover the solution, write your own, then compare step by step.

Case-study practice (Section A style)

Read the situation, then answer every part. In a school exam set on the board pattern this is a 7-mark question split into 1 + 3 + 2 + 1 marks.

Where the marks are

How a typical answer is split into step marks. Show every step: a right final answer alone rarely earns full marks.

Where students lose marks in Trial Balance

The slips examiners see most often, and what to write instead.

• ✗Mistake: Putting closing stock in the trial balance with opening stock

  Closing stock is found after the books are closed and normally appears only as an adjustment; listing it with opening stock and unadjusted purchases makes the trial balance disagree.

  ✓Do this: Include closing stock only when purchases are given as 'adjusted purchases'.

  Usually costs: 1-2 marks and the totals.

• ✗Mistake: Placing provisions and returns outward on the debit side

  Provision for doubtful debts, provision for depreciation and returns outward are credit balances.

  ✓Do this: Use the DEAD CLIC chart and the returns rule.

  Usually costs: 1 mark per item.

• ✗Mistake: Treating bank overdraft as a debit balance

  An overdraft is money owed to the bank.

  ✓Do this: Bank balance (favourable) = debit; overdraft = credit.

  Usually costs: 1 mark.

• ✗Mistake: Claiming that agreement proves accuracy

  Six types of error leave the totals equal.

  ✓Do this: Always write: agreement is proof of arithmetical accuracy only, not of complete accuracy, and name the errors.

  Usually costs: 1-2 marks in theory answers.

• ✗Mistake: Forgetting cash and bank balances

  They are in the cash book, which is also a ledger; students often omit them because they are not 'ledger accounts' in the list.

  ✓Do this: Tick cash and bank first when you list balances.

  Usually costs: 1 mark and the totals.

Practice questions on Trial Balance

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

1. Q1 · 1 mark · MCQExam level

   A trial balance is prepared to check the:
   (a) profit of the business
   (b) arithmetical accuracy of the books
   (c) financial position
   (d) cash balance only

   Hint

   Debits = credits.

   Answer

   (b) arithmetical accuracy of the books.

2. Q2 · 2 marks · Short answerExam level

   State two objectives and two limitations of a trial balance.

   Hint

   Accuracy, basis; hidden errors.

   Answer

   Objectives: to check arithmetical accuracy of posting; to provide a basis for final accounts. Limitations: errors of principle, omission, compensating errors and posting to a wrong account on the correct side are not revealed; it can be prepared only under double entry.

3. Q3 · 2 marks · Short answerExam level

   Name the side of: interest received, outstanding salary, prepaid insurance, returns inward, provision for depreciation, goodwill.

   Hint

   DEAD CLIC.

   Answer

   Credit: interest received, outstanding salary, provision for depreciation. Debit: prepaid insurance, returns inward, goodwill.

4. Q4 · 2 marks · Short answerHarder exam level

   Suppose the debit total of a trial balance is ₹3,52,000, and the only error is that carriage outwards of ₹4,500 was entered on the credit side. Find the credit total as prepared and the correct totals.

   Hint

   Carriage outwards is a debit.

   Answer

   As prepared, credit = 3,52,000 + 2 × 4,500 = ₹3,61,000. Correct: debit 3,52,000 + 4,500 = ₹3,56,500; credit 3,61,000 − 4,500 = ₹3,56,500.

5. Q5 · 2 marks · Short answerHarder exam level

   Find the missing capital: debit balances total ₹9,46,000 excluding drawings of ₹48,000; credit balances other than capital total ₹5,12,000.

   Hint

   Drawings is a debit too.

   Answer

   Total debits = 9,46,000 + 48,000 = ₹9,94,000; capital = 9,94,000 − 5,12,000 = ₹4,82,000.

6. Q6 · 2 marks · Short answerHarder exam level

   A trial balance is out by ₹2,700. Give two possible causes suggested by the figure.

   Hint

   Divisible by 2 and by 9.

   Answer

   2,700 ÷ 2 = 1,350: an item of ₹1,350 placed on the wrong side. 2,700 ÷ 9 = 300: a transposition, such as ₹5,280 written as ₹2,580 (thousands and hundreds digits swapped; 5,280 − 2,580 = 2,700). An omitted balance of ₹2,700 is also possible.

7. Q7 · 3 marks · Short answerHarder exam level

   Explain why a trial balance cannot detect a compensating error, with an example.

   Hint

   Two errors cancel.

   Answer

   A compensating error is two or more errors that cancel each other's effect on the totals. E.g. Wages A/c is overcast by ₹500 (debit too high) and Sales A/c is overcast by ₹500 (credit too high): both totals rise by ₹500, so the trial balance still agrees.

8. Q8 · 3 marks · Short answerHOTS / competency

   Suppose a trial balance agrees, but the owner says profit 'looks too low' by about ₹50,000. Give two errors that could cause this without affecting the trial balance.

   Hint

   Errors of principle and omission.

   Answer

   A machine of ₹50,000 bought debited to Purchases or Repairs A/c (error of principle, expense overstated); a credit sale of ₹50,000 not recorded at all (complete omission). Either lowers profit by ₹50,000 with the trial balance still agreeing.

9. Q9 · 2 marks · Short answerHOTS / competency

   Can a trial balance be prepared from a single-entry (incomplete) set of books? Why?

   Hint

   Equal debits and credits.

   Answer

   No. A trial balance relies on every debit having an equal credit. Under single entry only some aspects (often cash and personal accounts) are recorded, so debits and credits need not be equal.

10. Q10 · 3 marks · Short answerHOTS / competency

    Suppose a trial balance agrees at ₹7,28,000, but later it is found that the March sales book total of ₹36,000 was not posted to Sales A/c, and wages of ₹36,000 paid in cash (correctly entered in the cash book) were not posted to Wages A/c. Comment and give the correct totals.

    Hint

    Do the effects cancel?

    Answer

    The unposted sales total leaves the credit side ₹36,000 short; the unposted wages leave the debit side ₹36,000 short. The two errors compensate, so the trial balance agreed wrongly. Correct totals: 7,28,000 + 36,000 = ₹7,64,000 on each side.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

1. 1.Heading of a trial balance uses 'for the year ended' or 'as at'?Show answer

   'As at' a date.

2. 2.Method of trial balance in the ISC syllabus?Show answer

   Balance method.

3. 3.Side of returns outward?Show answer

   Credit.

4. 4.Item on the wrong side creates a difference of?Show answer

   Twice its amount.

5. 5.Difference divisible by 9 suggests?Show answer

   A transposition or slide of figures.

6. 6.Name two errors not disclosed by a trial balance.Show answer

   Errors of principle and of complete omission (also compensating, wrong account on the correct side, wrong amount in the original book, reversal).

Quick revision checklist

The night before the exam: can you do each of these without looking?

• ☐Trial balance = statement of ledger balances 'as at' a date.
• ☐Balance method: one figure per account; nil balances omitted.
• ☐Debit: drawings, expenses, assets, debtors, returns inward, opening stock.
• ☐Credit: capital, liabilities, incomes, creditors, returns outward, provisions.
• ☐Closing stock only with adjusted purchases.
• ☐Agreement = arithmetical accuracy only.
• ☐Wrong side → difference = 2 × amount; divisible by 9 → transposition.
• ☐Missing capital = Dr total − other Cr balances.

Trial Balance: frequently asked questions