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Difficulty: MediumBalancing Ledger Accounts and Extracting Trial Balance

The bookkeeper of Folake Stores extracted the following balances from the ledger accounts at the end of the financial year:

Account TitleBalance (₦)
Purchases280,000280,000
Sales450,000450,000
Capital200,000200,000
Rent Expense35,00035,000
Salaries65,00065,000
Motor Vehicles180,000180,000
Trade Debtors90,00090,000
Trade Creditors75,00075,000
Cash at Bank75,00075,000

What is the total of the debit column in the Trial Balance extracted by the bookkeeper?

  1. A
    ₦690,000₦690,000
  2. ₦725,000₦725,000Answer
  3. C
    ��800,000��800,000
  4. D
    ₦895,000₦895,000

Answer

₦725,000₦725,000
The debit column of a trial balance consists of assets, expenses, and purchases. Adding Purchases (₦280,000₦280,000), Rent Expense (₦35,000₦35,000), Salaries (₦65,000₦65,000), Motor Vehicles (₦180,000₦180,000), Trade Debtors (₦90,000₦90,000), and Cash at Bank (₦75,000₦75,000) gives a total of ₦725,000₦725,000.

Step-by-Step Solution

1
Identify all ledger accounts that carry normal debit balances (Assets and Expenses)
Debit items are Purchases (₦280,000₦280,000), Rent Expense (₦35,000₦35,000), Salaries (₦65,000₦65,000), Motor Vehicles (₦180,000₦180,000), Trade Debtors (₦90,000₦90,000), and Cash at Bank (₦75,000₦75,000).
According to double-entry rules, asset and expense accounts maintain debit balances.
2
Sum the balances of all debit items
280,000+35,000+65,000+180,000+90,000+75,000=725,000280,000 + 35,000 + 65,000 + 180,000 + 90,000 + 75,000 = 725,000
To calculate the total debit column in the trial balance.

Key Concept

Classification of Ledger Balances in a Trial Balance
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Topics

Balancing Ledger Accounts and Extracting Trial Balance

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