TOPIC 5

THE TRIAL
BALANCE
TRIAL BALANCE
A Trial balance is a list of all ledger
accounts with balances at a particular
date.
 All ledger account with zero balances at
the date the trial balance is being
prepares are excluded from the trial
balance.
  Allthe accounts with debit balances will
.

be listed in one column (debit column).

 Those with credit balances will be listed in
a second column.

 PURPOSE OF TRIAL BALANCE

 Act as a test of equality of the debit and
credit balances in the ledger
 Helps to localise errors
 Facilitate the preparation of the financial
statements
IF THE TRIAL BALANCE DOES
NOT BALANCE
 1. Omission of part of an entry
 2. Errors of transposition
 3. Errors in addition in ledger accounts
 4. Posting to incorrect sides of accounts
 5. Errors in the addition in the trial balance
itself
ERRORS NOT SHOWN BY THE
TRIAL BALANCE
 1. Error of omission
 2. Error of commission
 3. Error of principle
 4. Complete reversal entries
 5. Compensating errors
 6. Errors of original entry