Meaning of Trail Balance.

Trail balance is a statement, prepared with the debit and credit

balances of ledger accounts to test the arithmetical accuracy of the
books. It may also be prepared with debit and credit totals of ledger
accounts and also with balances and totals of ledger accounts. The trail
balance is prepared on a specific date. The total of the debit and credit
column of the amount must be equal and it is arithmetically correct.

Objectives:

1. Test of arithmetical accuracy.

2. Summarised information of ledger accounts.
3. Basis for preparing final accounts( Profit and Loss a/c & Balance Sheet).
4. Helpful for making adjustments.
 Format of Trial Balance
as on ( dd-mm-yyyy)
Particulars L.F Debit (Rs) Credit (Rs)

Methods of Preparing Trial Balance

1. Balance method.
2. Total method.
3. Total and Balance method.
Errors of Trail Balance:
Two types-
1.Errors disclosed by Trial Balance:
a. Posting on wrong sides.
b. Posting with wrong amount.
c. Omission of totaling of subsidiary books.
d. Omission of posting of subsidiary book total.
e. Carrying on wrong side of trial balance.
f. Omission to carry a balance from ledger to trial balance.
g. Wrong totaling or balancing of ledger accounts.
h. Wrong totaling of trial balance.
i. Carrying wrong amount of trial balance.

2.Errors not disclosed by Trial Balance:

a.Error of omission.
b.Error of commission.
c.Compensating error.
d.Error of principle.
Q2. Prepare a trail balance from the following balances taken from the
books of M/s ABC Enterprise on 31st March, 2011.

Particulars Rs Particulars Rs
Capital 73600 Purchases 1,00,000
Building 60,000 Fixtures 5,600
Machinery 17,000 Sales 1,04,000
Returns Outwards 2,600 Debtors 60,000
Returns Inwards 1,000 Interest received 2,600
Bad debts 2,800 Discount allowed 1,000
Cash-in-hand 400 Commission (cr) 1,000
Discount received 3,000 Drawings 2,500
Bank overdraft 10,000 Stock on 1.4.2010 2,500
Creditors 50,000 Depreciation 1,000