Bank Reconciliation Statement Test - 3

Sale of goods in cash is recorded in the cash book as separate subsidiary book i.e. cash book is prepared. so it is not recorded in the journal proper.

Ledger is the most important book in accounting system. it contains all the accounts to which the transactions recorded in the original entry are transferred.It is also called final entry.

The business have both cash and bank related transactions and thus they prepare double column cash book in which cash transaction is recorded in cash column and bank transactions are recorded in the bank column.

Real accounts are the assets of the firm and will always have a debit balance except sales account and purchase returns accounts which will show credit balance.

Nominal accounts are expenses and income of the firm for the current year and thus their balances are not to be carried forward to the next year. that is why they are transferred to trading & profit & loss account.

As asset and expenses will always/ mostly have a debit balance and capital, liability and incoem will have credit balances. so Debit balance shows asset / expenses and credit balance shows capital/liability/income.

Trial balance is the abstract or list of the ledger accounts at a closing date showing debit and credit balances for all the accounts and the cash book. It is a statement prepared to test the arthimatical accuracy of the ledger accounts.

Only ledger accounts showing balances are shown in the trial balance. so acocunt showing nil balances are not shown in the trail balance.

The question states that if the debit side is more than the credit side of the trial balance, then the excess amount is posted on the credit side as supenses acoount in order to tally trial balance.

Supenses account shows the entries which are not recorded properly or which are wrongly recoreded and need to be corrected and thus its debit side is separately shown on asset side and credit side on liabilities side. suspense account is not balanced.