THE TRIAL BALANCE 81 



July 31, Pays $80 for labor. 



Aug. 13, Buys some new equipment for $60 cash. 



Aug. 25, Pays $12 for cement, for sundry reppir work. 



Aug. 28, Receives $30 for six months' interest on note of James 

 Lewis. 



Sept. 1, Sells some oats for $550. 



Sept. 30, Pays labor $65. 



Oct. 1, Pays John Long enough to balance his account. 



Oct. 24, Sells some wheat for $2000 cash. 



Oct. 26, Pays $120 for six months' interest on mortgage note. 



Oct. 26, Pays $2000 on mortgage note. 



Oct. 27, Sells his poultry for $35. 



Oct. 31, Wages are paid in cash $30. 



Nov. 30, Pays for labor $40. 



Dec. 20, Pays $300 to carpenter for building a new shed. 



Jan. 17, 1918, Donates $20 to charity. 



Feb. 24, Receives $24 for one year's interest on note. 



Feb. 24, Receives $480 in full of note of that amount. 



Feb. 26, Pays taxes amounting to $90. 



4. Compare the financial statements prepared in problem 3 

 with those prepared in problem 2. Be ready for an oral or 

 written discussion on the changes that took place. 



REVIEW QUESTIONS 



1. What is a trial balance? 



2. What is meant by "taking off a trial balance"? 



3. When is a trial balance said to be "in balance"? When is 



it "off"? 



4. When is a ledger said to be "in balance"? When is it "out 



of balance"? 



5. What are the two main purposes of a trial balance? 



6. From an arithmetical point of view why are the sums of the 



debit and credit ledger balances equal, barring errors? 



7. What does a trial balance prove? 



8. Name three classes of errors that might be made in connec- 



tion with the debits and credits of a transaction without 

 causing the trial balance to be out of balance. 



