What is a trial balance and why is it prepared?
Resposta curta
A trial balance is a list of all the ledger account balances at a given date, with debit balances in one column and credit balances in the other. Because of double entry, the two totals should be equal. It is used to check the arithmetic of the bookkeeping and as the starting point for preparing the financial statements.
Passo a passo
- Balance off each ledger account.
- List every account with its balance in the debit or credit column.
- Assets, expenses and drawings go in the debit column.
- Liabilities, capital and income go in the credit column.
- Total both columns and check they agree.
Exemplo resolvido
A short trial balance
- Debit: Cash 2,000; Equipment 5,000; Rent 1,000
- Credit: Capital 6,000; Sales 2,000
- Totals: 8,000 debit and 8,000 credit
Erros comuns
- Putting a balance in the wrong column.
- Assuming an agreed trial balance means there are no errors. Errors of omission or of principle do not show.
- Leaving out an account, especially opening capital.
Útil para:WAECA LevelMatricKCSE
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