Trial balance is a statement, prepared with the debit and credit balances of Ledger accounts to test the arithmetical accuracy of the books. Trial Balance Format is also given below.
Features of Trial Balance
It is a list of balances of all ledger accounts and the cash book.
It is just a statement, and not an account.
It is neither a part of double entry system, nor does it appear in the actual books of accounts. It is just a working paper.
It can be prepared at any time during the accounting period, say, at the end of every month, every quarter, every half year or every year. Usually it is prepared at the end of accounting year before preparing the final accounts.
It is always prepared on a particular date and not for a particular period.
It is prepared to check the arithmetical accuracy of the ledger accounts.
If the books are arithmetically accurate, the total of all debit balances of a trial balance will be equal to the total of all credit balances.
A tallied Trial Balance is not a conclusive proof of the accuracy of the books of accounts since certain type of errors remain even when the Trial Balance tallies.
Need of Trial Balance
To ascertain the arithmetical accuracy of the ledger accounts.
To help in locating errors.
To obtain a summary of the ledger accounts.
To help in the preparation of Final Accounts.
Trial Balance Format
As per Balance method
Name Of Accounts
L.F.
Balance Dr.
Balance Cr.
Cash A/c
55,000
Bank A/c
3,80,000
Capital A/c
2,00,000
Purchases A/c
4,90,000
Sales A/c
8,54,000
Dinesh
58,000
Gopal
80,000
Nitin
50,000
Furniture A/c
25,000
Rent A/c
4,000
Drawing A/c
15,000
Salaries A/c
14,500
Purchase Return A/c
2,000
Total
11,14,000
11,14,000
Trial Balance Format
As per Total Method
Name Of Accounts
L.F.
Total Of Debit Items
Total Of Credit Items
Cash A/c
234,000
168000
Bank A/c
850000
470000
Capital A/c
200000
Purchases A/c
490000
Sales A/c
854000
Dinesh
412000
470,000
Gopal
530,000
450000
Nitin
300,000
250000
Furniture A/c
25,000
Rent A/c
4,000
Drawing A/c
15,000
Salaries A/c
14,000
Purchase Return A/c
2,000
Total
2864500
2864500
1 thought on “Trial Balance – Meaning, Objectives And Format”
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