Unit 5 Posting and Trial Balance
Lead-in
Identify the pictures below.Match them with the words in the box.
Section A
Dialogue 1
Mr.Smith is a new accountant in Aerofirma Corporation, and Mr.Zhang has worked as an accountant in this company for 2 years.They are checking the list of posting for this month.
S=Mr.Smith Z=Mr.Zhang
Z: Good morning.
S: Good morning.
Z: Mr.Smith, we have to transfer all the transactions to the general ledger.
S: OK, I have finished half of it.
Z: Please pay attention to the transactions at the beginning of this month.
S: I’ll check it again.I’ve stored these data before.
Z: Good job.We have to finish this work today.
S: No problem.I won’t go home until I finish it.
Z: I will present the result to our manager tomorrow morning.Thank you for your cooperation.
S: I will post all the transactions in time, and make a trial balance for you.
Z: OK, thank you again.
New Words
Phrases and Expressions
general ledger 总账
trial balance 试算平衡表
Dialogue 2
Mr.Zhang and Mr.Smith in Aerofirma Corporation are going to make a trial balance after posting the journal to the general ledger.
S=Mr.Smith Z=Mr.Zhang
S: Good afternoon, Mr.Zhang.
Z: Good afternoon, Mr.Smith.You need to make a trial balance this week.
S: Yes, I know.We are supposed to check whether the total debits equals total credits.
Z: You are totally right.I will give you the data from all of our open general ledger accounts.
S: Thank you very much.
Z: If the trial balance fails, we have to find errors again.Therefore, before making the balance, carefully check the figures in advance.
S: I get it.I have checked the figures in debits yesterday.
Z: Once all errors have been corrected, we will publish the account balances in the period financial accounting reports around next Friday.
S: OK, I will finish it as soon as possible.
New Words
Phrases and Expressions
debit accounts 借方账项
Exercise 1
Decide whether the following statements are true (T) or false (F) according to the dialogues.
□ 1.Mr.Smith is supposed to work out a trial balance next week.
□ 2.Mr.Zhang is an accountant.
□ 3.Posting is an error-checking method.
□ 4.In dialogue two, it is Mr.Smith who is responsible for the trial balance.
□ 5.The account balances are going to be presented this Monday.
Exercise 2
Oral practice: Pair work.Use the questions below to interview your partner.Then change roles.
1.Can you show me the trial balance?
2.How long have you worked on the list?
3.Have you post all these figures to the general ledger?
4.Who made this trial balance?
5.Is the data right?
Exercise 3
Practical activity: Work in pairs and make a conversation.
Directions: Suppose you are Mr.Green, an accountant from Aerofirma Corporation and you are designated to take charge of the accounts of the whole company.It is the first time you meet the staff working on the general journal.
Section B
Trial Balance
The trial balance highlights a well-known advantage of the double entry system–built in error checking.At the end of a reporting period, accountants create a trial balance from all active accounts, to see if total debits equals total credits.An imbalance between totals signals an error in the system.
The terms trial balance and trial balance period refer to an error-checking step in the accounting cycle.The terms have meaning only in companies that use a double entry accounting system.Figure 5-1 below shows the major steps in the accounting cycle.Firms complete the entire cycle once every accounting period.Here, note that accountants create a trial balance after posting all the period’s transactions to the general ledger but before they transfer account balances to the period’s financial reports.
Figure 5-1 The Accounting Cycle
Figure 5-1: Trial balance in the accounting cycle.Transactions enter the system in the journal, step one in the accounting cycle.Posting transfers journal entries to a ledger as the second step.Thirdly, checking entries with a trial balance and correcting if necessary, are the third step.The final steps are publishing the financial statements and auditing.
The trial balance uses data from all of the firm’s open general ledger accounts.The “trial” itself simply compares two sums: total debits and total credits.
·When the firm applies double entry principles correctly, total debits from all accounts must equal total credits.
·A mismatch between trial debit and credit sums means that one or more accounts includes errors or omissions.
When the trial balance fails, accountants search for several kinds of errors that might cause the mismatch:
·Firstly, a debit entry in one account did not bring an equal and offsetting credit entry in another account.
·Secondly, some transactions either did not enter the system, or were entered into inappropriate accounts.
·Thirdly, account balance calculations include other errors in data entry or mathematics.
The trial balance test, incidentally, is not comprehensive error checking.Quite a few other kinds of errors can enter the system, while leaving total debits equal to total credits.As a result, the trial balance period calls for several other kinds of error checking besides the trial balance itself.
Calculating a trial balance
The trial balance calculation has in view every active account from the company’s chart of accounts and general ledger.
·Note that each account carries one kind of balance only, either a credit balance or a debit balance.
·The table registers debit and credit balances in separate columns, and with column totals in the table’s bottom row.
·The trial balance test, of course, occurs in the table’s bottom row, where the two kinds of totals either match or do not match.
Example account balance: Cash on hand
Figure 5-2, below, helps explain the meaning of account balance in this context.Consider, for instance, just one account, “Cash on hand”.Debit (DR) and credit (CR) transactions in this account have been posted from the journal to the general ledger.The ledger organizes transactions by account, in so-called “T-accounts”, such as the example in Figure 5-2.
Figure 5-2
Figure 5-2: A ledger T-account for one account, cash on hand, for several days transactions.Cash on hand is an asset account and this means that debits increase its balance, and credits decrease its balance.This asset account, therefore, is said to carry a debit balance.
Note that total debits and total credits to a single account are not necessarily equal, either for the period or for the account’s entire history.Note especially that the difference between debit and credit totals across the account’s history, represents the current account balance.
Debit and credit impacts in different kinds of accounts
Table 5-1, below, shows that two of the five major account types show debit balances, whereas the other three account types show credit balances.Note that the five account types belong to two higher level categories.These categories are as follows:
·Firstly, balance sheet accounts.These include (1) Asset accounts, (2) Liability accounts, and (3) Equity accounts.These 3 account types make possible the balance sheet equation: Assets=Liabilities + Equities.
·Secondly, Income statement accounts.These include (4) Revenue accounts and (5) Expense accounts.These 2 account types make possible the Income statement equation: Income=Revenues–Expenses.
Table 5-1 also shows impact of debit and credit transactions in each of account type.
Table 5-1
Table 5-1: The five major kinds of accounts.A positive balance in an Asset account or Expense account is a debit balance.A positive balance in a Liability account, an Equity account, or a Revenue account, is a Credit balance.
End of period balances for all accounts
Now consider the account balances at the end of period.This is after all the period’s transactions post to the ledger T-accounts.Looking only at account balances, the trial balance results appear below as Table 5-2.
Table 5-2
Table 5-2.General ledger account balances for a company at the end of the reporting period.The trial balance test simply compares total debit balances to total credit balances.In this case, the totals match and the trial balance therefore does not reveal any accounting errors.(Note that for simplicity, this list of accounts is unrealistically short.Also for the sake of simplicity, the Exhibit does not include contra accounts, drawing accounts, depreciation expenses, or taxes.)
Passing the test
In Table 5-2, the trial sums in this example balance.That is because the total of debit balances equals the total of credit balances.The mathematics behind this result also mean that the sum of individual debit transactions equals the sum of individual credit transactions.
A successful trial balance notwithstanding, accountants will still check carefully for the other kinds of accounting errors that do not impact a trial balance.Once all errors have been corrected, the account balances are ready for publication in the period financial accounting reports.
New Words
Phrases and Expressions
error checking 错误校验(https://www.daowen.com)
accounting cycle 会计周期
credit balance 贷方余额
debit balance 借方余额
asset account 资产账户
liability account 负债账户
equity account 权益账户
revenue account 收入账户
expense account 开支账户
for the sake of 由于……
contra account 对销账户
drawing account 提存账户
depreciation expense 折旧费用
Exercise 1
Choose the best answer to each of the following questions.
1.What is NOT mentioned in the text?
A.The meaning of a trial balance.
B.The mismatch between trial debit and credit sums.
C.The impact of debit and credit transactions in five account types.
D.Single entry accounting system.
2.How many account types are talked about in the text?
A.Five. B.Seven.
C.Eight. D.Six.
3.Which account type does not show credit balance?
A.Equity Account.
B.Revenue Account.
C.Expense Account.
D.Liability Account.
4.According to the text, which of the following statement is NOT true?
A.The trial balance highlights a well-known advantage of the double entry system—built in error checking.
B.The terms of trial balance and trial balance period have meaning only in companies that use a double entry accounting system.
C.The trial balance uses data from all of the firm’s open general ledger accounts.
D.Total debits and total credits to a single account are necessarily equal.
5.Which of the following does NOT belong to Asset Accounts?
A.Cash on hand.
B.Accounts receivable.
C.Accounts payable.
D.Factory manufacturing equipment.
Exercise 2
Fill in the blanks with the words given below.Change the form where necessary.
1.You can_______this format information.
2.Never was the_______between the idea of the war and the war itself more apparent.
3.They refused to treat with us on_______terms.
4.Undoubtedly, this goal has to be achieved through an_______language.
5.This is_______to cause misunderstanding.
6.The wine,_______, goes very well with a mature cheese.
7.How much segment information should a firm_______?
8.The company shrunk the Asian and European editions of_______into tabloids in 2017.
9.She was_______dressed, with fine furs and jewels.
10.Company computers are_______at 50% per year.
Exercise 3
Translate the following sentences into Chinese.
1.The trial balance highlights a well-known advantage of the double entry system—built in error checking.
2.Here, note that accountants create a trial balance after posting all the period’s transactions to the general ledger but before they transfer account balances to the period’s financial reports.
3.When the firm applies double entry principles correctly, total debits from all accounts must equal total credits.
4.The mathematics behind this result also mean that the sum of individual debit transactions equals the sum of individual credit transactions.
5.A successful trial balance notwithstanding, accountants will still check carefully for the other kinds of accounting errors that do not impact a trial balance.
课文译文
试算平衡
试算平衡充分体现了复式记账体系广为人知的优势——错误校验。在一个报表周期末，会计们根据所有的活动账户建立一个试算平衡表，以查看借贷双方是否平衡。两者之间出现一处不平衡则表示该体系中的一处错误。
术语“试算平衡”和“试算平衡周期”表示会计周期中的错误校验步骤。两个术语仅在使用复式记账体系的公司中有存在意义。下方图5-1中展示了会计周期的主要步骤。每一个会计期间公司完成一整个会计周期。在此注意，在将所有该期间的交易过账到总账之后以及将账户余额转移到该期财务报告之前，会计们会建立一个试算平衡表。
图5-1 会计周期
图5-1：会计周期中的试算平衡。步骤一在会计周期中表示交易进入分类账的系统。步骤二表示将分类账目转移到总账。步骤三表示在必要情况下，使用试算平衡表检测并改正账目。步骤四表示提交财务报表并进行审计。
试算平衡使用公司所有公开的总账账户的数据。“试算”本身只是比较两个总额：借记总额和贷记总额。
·当公司正确地运用复式原则是，借记总额必然等于贷记总额。
·试算借贷双方总额时出现匹配错误，则意味着一个或多个账户存有数据错误或数据缺失。
当试算平衡不成功，会计们就会寻找以下几种可能导致错误匹配的问题。
·第一，一个账户中的借方记录不会与另一账户中的贷方记录相等或抵消。
·第二，某些交易要么有进入系统，要么进入了另一个错误的账户。
·第三，账户平衡计算在数据记录或数学运算过程中存在其他的错误。
有时候试算平衡测试并不能进行全面的错误检测。在使借记总额等于贷记总额的过程中，各类错误都有可能进入该系统。结果试算平衡周期需要包括平衡表在内的几种其他错误校验。
计算一个试算平衡表
试算平衡表计算考虑到了公司的会计汇总表和总账中的每一个活动账户。
·请注意，每一个账户仅有一种结余，贷方结余或借方结余。
·登记借贷双方的表格在各个单独的列中平衡，每列总额在表格的最底端一行。
·当然，试算平衡测试是在表格的最底端一行进行，在此即可查看两类总额匹配与否。
账户结余示例：库存现金
下方图5-2用以解释本文中账户结余的意义。比如，试想只有一个账户，“库存现金”。该账户中的借方和贷方交易已经从分类账过账到总账。在“T-账户”中，分类总账按账户将各项交易系统化，如图5-2。
图5-2
图5-2：一个分类总账T-账户对应一个账户，几天交易后的库存现金。库存现金是一个资产账户，即借方增加其结余，贷方减少其结余。由此，该资产账户承载借方结余。
注意，无论是在该会计周期还是账户的整个存在期间，对一个单一账户来说，借记总额和贷记总额不是必然相等的。尤其要注意的是贯穿账户的历史的借贷总额之间的差异仅代表当前账户结余。
借贷在各类账户中的影响
下方表5-1表示五个主要账户种类中，其中两个账户表示借方余额，另外三个账户表示贷方余额。注意，五个账户类别属于两个更高层级的分类。这些分类如下：
·第一，资产负债表账户。其中包括（1）资产账户，（2）负债账户，以及（3）权益账户。这三个账户类型使得资产负债表等式得以成立：资产=负债+权益
·第二，损益表账户。其中包括（4）收益账户，（5）支出账户。这两个账户类型是的损益表等式得以成立：收入＝收益－支出
表5-1也表示在每一个账户种类中借贷交易的影响。
表5-1
表5-1：五个主要账户种类。一个资产账户或支出账户中的正平衡值是借方余额。一个负债账户、权益账户或收益账户的正平衡值是贷方余额。
所有账户的会计周期末余额
会计周期末账户余额如下。这是所有会计周期内的交易过账到分类总账T-账户中后的结果。只看账户余额，试算平衡表结果如表5-2。
表5-2
续表
表5-2：报表周期末，一个公司的总账账户余额。试算平衡测试仅仅是比较借方余额和贷方余额。此间，余额总值相等且试算平衡未发现任何计算错误。（注意，为了简洁，该账户列表比实际列表短太多，并且该表没有包含抵销账户，提存账户，折旧费用，或者税收。）
测试通过
表5-2中，试算总值在该样表中是平衡的。这是由于借方余额总值与贷方余额总值相等。该结果后面的数学计算表示每一笔借记交易总额与每一笔贷记交易总额相等。
尽管有一个成功的试算平衡表，会计们依然会仔细检查其他未影响试算平衡的计算错误。所有错误校验完毕之后，该账户余额才会在周期财政会计报表中公布。
References
[1]Solution Matrix Ltd.Trial Balance, Trial Balance Period—Definitions, Examples, Meaning Explained[EB/OL].(2018-08-19) [2018-08-20] https://www.business-case- analysis.com/trial-balance.html#trial-balance-period.
[2]孙耀远，祁渊.会计学原理 [M].北京：外语教学与研究出版社，2009.
