TRIAL BALANCE

TRIAL BALANCE
■ A trial balance is a statement prepared with the debit and credit
balance of the ledger accounts to test the arithmetical accuracy of the
books.
■ A trial balance is the list of debit and credit balances taken out from
the ledger, it also includes the balances of cash and bank taken from
the cash book.
FEATURES OF TRIAL BALANCE

1. It is a list of ledger accounts which are balanced in rupees.

2. It is a part of double entry system of book keeping.
3. It can be prepared on any data.
4. It verifies the arithmetical accuracy of posting of entries from journal to
ledger.
5. It is not a conclusive proof of the accuracy of the books of accounts.
OBJECTIVES OF TRIAL BALANCE:

1. To ascertain the arithmetical accuracy of ledger account.

2. To help in the preparation of final account.
3. Summary of each account.
4. To help in locating mathematical errors.
METHODS OF PREPARING TRIAL
BALANCE:
1. BALANCE METHOD:
In this method only the debit or credit balances are entered separately in the
two columns. This is known as balance method.

2. TOTAL METHOD:
In this method the total of each side of the account is entered respectively in
the debit and credit columns of the trial balance. This trial balance is known
as gross trial balance.
 DIFFERENCE B/W
BY BALANCE METHOD AND BY TOTAL METHOD
BY BALANCE METHOD BY TOTAL METHOD
1. It can be prepared after all the ledger 1. It can be prepared immediately after the
a/c have been balanced. completion of posting from books of
original entries to the ledger.
2. It shows the balances of all the a/c in 2. It shows the total amount of debit and
the ledger. credit side in each ledger a/c.
3. It considers only those a/c which shows 3. It considers all the a/c of ledger.
a balance. If an a/c shows no balance, it
will not be considered.
Q. The following Trial Balance is drawn from the books of Brown
Traders.
Debit balances Rs. Credit Balances Rs.
Building 60,000 Capital 73,600
Machinery 17,000 Fixtures 5,600
Return Outwards 2,600 Sales 1,04,000
Bad Debts 2,800 Debtors 60,000
Cash 400 Interest Received 2,600
Discount Received 3,000
Bank Overdraft 10,000
Creditors 50,000
Purchases 1,00,000
2,45,800 2,45,800
Solution: HEAD OF ACCOUNT  Dr Bal  Cr Bal 

Building   60,000   

Machinery   17,000   

Return Outwards     2,600 

Bad Debts  2,800   

Cash  400   

Discount Received     3,000 

Bank Overdraft     10,000 

Creditors    50,000 
Purchases  1,00,000   
Capital     73,600 
Fixtures   5,600   
Sales    1,04,000 
Debtors   60,000   

Interest Received     2,600 

TOTAL à  2,45,800  2,45,800 

THANK
YOU