IGCSE Trial Balance
We will learn the format of a trial balance, how to post the balances of accounts from the T-ledger to the trial balance and the steps to prepare a trial balance from a list of account balances at the end of an accounting period.
Related Lessons:
Purpose Of Trial Balance
The trial balance is a statement that lists the closing balances of all the ledger accounts on a given date.
The purpose of preparing one is to check for arithmetical accuracy of the accounts and for the ease of preparing the financial statements.
Format Of Trial Balance
Header
The header of a trial balance states the date on which the balances of the accounts are extracted from the ledger. This date indicates the day, month and year of the statement.
The trial balance is made up of three columns containing the following information:
First column – Particular
In this column, we list down the name of the accounts that the business has.
Second column – Debit
Right after the particular column is the debit column. This column records the amount of the account with a debit balance.
Third column – Credit
Next to the debit column is the credit column which records the amount of the account with a credit balance.
Total Balance
The amounts in the debit and credit columns are totaled. The total debit must equal the total credit. If they do not balance, it indicates that errors may have occurred in the recording process.
Preparing A Trial Balance
To prepare a trial balance,
We first state the date on which the balances of the accounts are extracted in the Header.
Next, in the Particular column, we list down the name of the accounts, one account per row, that the business has.
In the Debit column, we record the amount of the account with a debit balance.
In the Credit column, we record the amount of the account with a credit balance.
Finally, we totaled the amounts in the debit and credit columns.
As a recap,
Assets, Expense, Drawings are accounts with debit balances.
Liability, Income, Capital are accounts with credit balances.