Trial Balance

By Debayan Ray
What is trial balance ?
• After the transactions are posted to various ledger accounts (either from
journal or from subsidiary books) and they are balanced, the next stage is
to draw up the list of all balances. We know that some ledger accounts
will show ‘debit balance’ (debit side greater than the credit side), while
the other will reflect a ‘credit balance’ (credit side being higher than debit
side). All account balances are listed to ensure that the total of all debit
balances equals the total of all credit balances. Why does this happen?
Remember the dual aspect concept studied earlier in this study note?.
According to this concept, every debit has equal corresponding credit.
This list of balances is called Trial Balance.
Feature’s of a Trial Balance
• 1. It is a list of debit and credit balances which are extracted from
various ledger accounts.
• 2. It is a statement of debit and credit balances.
• 3. The purpose is to establish arithmetical accuracy of the
transactions recorded in the Books of Accounts.
• 4. It does not prove arithmetical accuracy which can be determined
by audit.
• 5. It is not an account. It is only a statement of account.
• Summary of Rules

• Debit Balance — All Assets, Drawings, Debtors, Expenses and losses.

• Credit Balance — All liabilities, Capital, Creditors, Gains and Incomes.
From the following ledger account balances, prepare a Trial Balance of Mr. Sen for the year ended 31st
March,2013.
 In the books of Mr. Sen as at 31st march 2017
Head of Accounts Amount Head of accounts Amount
Adjusted Purchase 8,00,000 Capital 80,000
Petty Cash 10,000 Sales 10,00,000
Sales Ledger Balance 1,20,000 Current a/c 10,000
Salaries 24,000 Purchase Ledger Balance 60,000
Carriage Inward 4,000 Outstanding Expenses 10,000
Discount Allowed 10,000 Loan a/c 66,000
Buildings 80,000 Profit and loss a/c (Cr) 20,000
Prepaid Insurance 2,000 Bad debt recover 2,000
Depreciation 4,000 Interest received 10,000
Cash at Bank 80,000 Provision for bad debt 6,000
Stock (31.03.2013) 1,20,000 General Reserve 20,000
Accrued Interest 4,000
Investment 20,000
Carriage outward 6,000
Total 12,84,000 Total 12,84,000
Prepare Trial Balance as on 31.03.2012 from the following balances of Ms. Maliha Afzal:
• Drawings Rs. 74,800
• Purchases Rs. 295,700
• Stock (1.04.2011) Rs. 30,000
• Bills receivable Rs. 52,500
• Capital Rs. 250,000
• Furniture Rs. 33,000
• Discount allowed Rs. 950
• Sales Rs. 335,350
• Rent Rs. 72,500
• Freight Rs. 3,500
• Printing charges Rs. 1,500
• Sundry creditors 75,000
• Insurance Rs. 2,700
• Sundry expenses Rs. 21,000
• Discount received Rs. 1,000
• Bank loan Rs. 120,000
• Stock (31.03.2012) Rs. 17,000
• Income tax Rs. 9,500
• Machinery Rs. 215,400
• Bills payable Rs. 31,700
Thank You