Question
The bookkeeper of Weston & Co prepared the following trial balance at April 30, 2026, which does not balance.
| Account | Debit | Credit |
|---|
| Cash | 13,240 | |
| Accounts Receivable | 11,000 | |
| Equipment | 24,000 | |
| Accounts Payable | | 8,500 |
| Unearned Service Revenue | | 3,100 |
| Owner Capital | | 30,000 |
| Owner Drawings | | 1,500 |
| Service Revenue | | 17,500 |
| Salaries and Wages Expense | 5,400 | |
| Rent Expense | 810 | |
| Utilities Expense | ____ | 450 |
| Total | 54,450 | 61,050 |
An examination of the ledger and journal reveals the following errors:
- Equipment costing $1,000 was purchased on account, but the credit posting to Accounts Payable was made as $100.
- The balance of Utilities Expense, $450, was listed in the credit column of the trial balance.
- A $2,300 collection from a customer on account was correctly debited to Cash but was credited to Service Revenue instead of Accounts Receivable.
- The Prepaid Insurance account, with a balance of $3,600, was omitted from the trial balance entirely (it is correct in the ledger).
- Owner Drawings of $1,500 was listed in the credit column of the trial balance.
Instructions:
Prepare a corrected trial balance at April 30, 2026.
Scoring
- 40% Account naming / line matching
- 40% Amount correctness
- 20% Structure / section placement
IAS 1 — Presentation of Financial Statements
Work the cycle in its fixed order: journalise, post to the ledger, extract an unadjusted trial balance, pass adjusting entries, extract an adjusted trial balance, prepare the statements, then close the temporary accounts. Each step consumes the output of the one before it, so an error early on propagates all the way to the closing entries rather than staying local.
Common mistakes
- Preparing the financial statements from the unadjusted trial balance instead of the adjusted one.
- Closing permanent accounts — assets, liabilities and capital carry forward; only revenue, expense and drawings/dividends close.
- Forgetting that the post-closing trial balance should contain no income statement accounts at all.
Further readingIAS 1: what goes where in a full set of statements