Chapter Three
Designing of Extended Trail Balance
Course Name
: Computer Application in Finance
Course Code
: BAFI4100
Specialization
: Accounting And Finance
Department of Business Studies
University of Technology and Applied Sciences
Learning Outcomes
 Design and generate ‘Extended Trial Balance’ as an important financial tool
Essential Reading :
Periasamy, P.. Textbook of Financial, Cost and Management Accounting, Global Media, 2009
https://ebookcentral.proquest.com/lib/hctom/detail.action?docID=3011183
ACCA FA 2 - Maintaining Financial Records, BPP Learning Media. 2017 (MASADER)
https://search.ebscohost.com/login.aspx?direct=true&db=e000xww&AN=1526219&site=edslive&ebv=EB&ppid=pp_75
Suggested Reading :
Elaine Marmel and Elaine Marmel, Office 2013 Simplified, John Wiley & Sons.
https://ebookcentral.proquest.com/lib/hctom/reader.action?docID=1165235&ppg=146
Extended Trail Balance
A worksheet which takes a trial balance, makes year end adjustments and produces a
draft statement of financial position and statement of profit or loss.
Period end adjustments are accounting adjustments to the trial balance required for the
preparation of the period end financial accounts.
Such adjustments include:
• Depreciation
• Accruals and prepayments;
• Closing inventory
• Irrecoverable debts
• Allowance for receivables
• Creation of Provisions
Extended Trail Balance
Extended Trail Balance
(a) Account – the first column is used to list all the general ledger accounts.
(b) Trial balance – the next section containing two columns is used to list the balances
on all the general ledger accounts. The balance on an account is put into either the
debit column or the credit column as usual.
(c) Adjustments – these sections are used to record any period-end adjustments to the
trial balance made via journals. A double entry is performed for each adjustment using
the debit and credit columns.
(d) Accrued and prepaid – these record the accruals and prepayments needed to adjust
the expense transactions already recorded in the ledger accounts and on the trial
balance. The individual statement of profit or loss account entries are recorded in these
columns, and the posting to the statement of financial position is done in total.
Extended Trail Balance
(e) Statement of profit or loss – account balances that belong in the statement of profit
or loss will be carried across to one of these columns.
(f) Statement of financial position – account balances that belong in the statement of
financial position will be carried across to one of these columns.
It is of vital importance that the debit column total and credit column total of the trial
balance and adjustments sections balance before moving on to the next sections.
Extended Trail Balance
The following balances have been extracted from the books of ABC.
Extended Trail Balance
Extended Trail Balance
Adjustments : (i) Depreciation Charge on Buildings OMR 15,000
Extended Trail Balance
Adjustments : (ii) Irrecoverable Debt Written Off OMR 2000
Extended Trail Balance
Adjustments : (iii) Accrued Rent OMR 200
Extended Trail Balance
Adjustments : (iv) Prepaid Insurance $100
Extended Trail Balance
Adjustments : (iv) Closing Inventory OMR 94,500
Extended Trail Balance
Adjustments : (v) Create Provision for Discount on Payables : OMR 1000
Extended Trail Balance
Adjustments : (v) Create Provision for Discount on Payables : OMR 1000
Extended Trail Balance
Completing the Extended Trail Balance
Extended Trail Balance
Problem 1
Prepare Extended Trail Balance
Extended Trail Balance
Adjustments : Commission Earned but not Received : OMR 400
Extended Trail Balance
Adjustments : Rent received in advance : OMR 1000
Extended Trail Balance
Problem 2
Prepare Extended Trail Balance
Extended Trail Balance
Problem 3
Prepare Extended Trail Balance
Extended Trail Balance
If Provision for Doubtful debts is given in Trail balance and also in adjustments
Extended Trail Balance
Name of the Account
Trail Balance
Dr
Adjustments
Cr
Dr
Cr
Accural
Dr
Prepaid
Cr
Statement of Profit or Loss
Dr
Cr
Statement of Financial Position
Dr
Cr
Old Provision > New Provision
Debtors
OMR 110,000.000
Provision for Doubtful Debts
OMR 500.000
OMR 525.000
OMR 109,500.000
OMR 500.000
OMR 25.000
Adjustments : Provision for Doubtful Debts need to be adjusted to RO 500
Old Provision < New Provision
Debtors
Provision for Doubtful Debts
OMR 110,000.000
OMR 560.000
OMR 525.000
Adjustments : Provision for Doubtful Debts need to be adjusted to RO 560
OMR 560.000
OMR 109,440.000
OMR 35.000
Extended Trail Balance
Problem 4
Prepare Extended Trail Balance
Extended Trail Balance
Problem 5
Prepare Extended Trail Balance
Extended Trail Balance
Problem 6
Prepare Extended Trail Balance
Contact Information
Dr. T V V Phani Kumar
Office No. BS 047
Ext : 5216
email : phani.kumar@hct.edu.om
Version No
Date Approved
01
Sem. 2, 2020-2021
02
Sem. 2, 2021-2022
Changes incorporated