school education: Jul 18, 2011

TRIAL BALANCE

The variance between debit side and credit side is called the balance
Once the balances of the individual accounts have been determined, a trial balance can be prepared
A trial balance is a list of all the accounts in the ledger with their current balances
A trial balance represents of the proof of the equality between debit balances and credit balances

The Usefulness of Trial Balance

A trial balance will show a summary of the accounts in general ledger
It will be the basis for preparing the financial statements
A trial balance is a testing process of the equality between debit balances and credit balances. It also defines the calculation validity in recording transaction in the current period

Preparing of The Trial Balance

The first step in preparing the trial balance is to determine the balance of each account in the ledger
When the standard account form is used, the balance of each account appears in the balance column on the same line as the last posting to the accounts
The procedure in preparing a trial balance will depend on the form of accounts in general ledger
When report form is used, the account balance can be monetored anytime
When T-account form is used, the balance of each account have to be calculated previously

The steps in Preparing T-Trial Balance Form

To add the debit side in each account
To add the credit side in each account
To calculate the variance between debit side and credit side
To determine the balance of each account
To transfer the balance of each account into debit column or credit column of trial balance

school education