TOPIC: TRIAL BALANCE

A trial balance is actually a list of debit and credit balances extracted from the accounts in the
Ledger. It is not an account and does not form part of the double-entry system. It may be
prepared at any time to check the equality of the debits and the credits. However, it is usually
prepared at the end of the accounting period.

USES OF THE TRIAL BALANCE

1. To check the mathematical accuracy of the book-keeping.
2. To make it easier to prepare the final accounts and Balance Sheet.

STEPS IN THE PREPARATION OF THE TRIAL BALANCE

1. Add up the total on the two sides of the ledger accounts.
2. Determine the amount and type of balance in the ledger account.
3. List all debit balances on one side and all credit balances on another side.
4. Add up the debit balances and credit balances. Both totals must balance, in other words,
be exactly the same as each other.

How to know if an account should be a Debit or a Credit

Assets = Debit Column
Liabilities = Credit Column
Equity/Capital = Credit Column
Income = Credit Column