Question
The following ledger account balances were taken from the books of Marlowe Consulting at December 31, 2025. All accounts have their normal balances.
| Account | Balance |
|---|
| Cash | $12,000 |
| Accounts Receivable | 8,000 |
| Supplies | 2,000 |
| Equipment | 40,000 |
| Accumulated Depreciation - Equipment | 6,000 |
| Accounts Payable | 4,000 |
| Unearned Revenue | 3,000 |
| Share Capital - Ordinary | 30,000 |
| Retained Earnings | 9,000 |
| Dividends | 5,000 |
| Service Revenue | 52,000 |
| Salaries and Wages Expense | 28,000 |
| Rent Expense | 9,000 |
Required: Prepare the trial balance at December 31, 2025, placing each account in its correct debit or credit column, and prove that total debits equal total credits.
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