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.
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. This date indicates the day, month and year of the statement.
The first column in the Trial Balance is the Particular column. Here we list down the name of the accounts that the business has.
The next column is the Debit column. We record the amount of the account with a debit balance.
Right after the debit column is the Credit column. This column records the amount of the account with a credit balance.
The final step in the preparation is to total the amounts in the debit and credit columns. The total debit must equal the total credit. If they do not balance, it indicates that errors may have occurred in the recording process.
As a recap,
Assets, Expense, Drawings are accounts with debit balances.
While Liability, Income, Capital are accounts with credit balances.