A trial balance is a bookkeeping worksheet that compiles the debit and credit balances of all general ledger accounts. It is prepared periodically, usually at the end of a reporting period, to check that the mathematical totals of debits and credits in the general ledger are equal. It acts as the first step in preparing financial statements and ensures account balances are accurately extracted from ledgers. While a trial balance verifies arithmetic accuracy, some errors may remain undetected if offsetting incorrect debits and credits are made.

1. Trial balance
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Shruti

2. What is trial balance?
A bookkeeping worksheet in which
the balances of all ledgers are
compiled into debit and credit
columns. A company prepares a trial
balance periodically, usually at the
end of every reporting period. The
general purpose of producing a trial
balance is to ensure the entries in a
company's bookkeeping system are
mathematically correct.

3. For example

4. Purpose of trial balance !
 Trial Balance acts as the first step in
the preparation of financial
statements. It is a working paper that
accountants use as a basis while
preparing financial statements.
 Trial balance ensures that the account
balances are accurately extracted
from accounting ledgers.
 Trail balance assists in the
identification and rectification of
errors.

5.  Trial balance ensures that for every debit
entry recorded, a corresponding credit
entry has been recorded in the books in
accordance with the double entry concept
of accounting. If the totals of the trial
balance do not agree, the differences may
be investigated and resolved before
financial statements are prepared.
Rectifying basic accounting errors can be
a much lengthy task after the financial
statements have been prepared because
of the changes that would be required to
correct the financial statements.

6. Features of trial balance!
 It is a list of balance of ledger accounts and
cash book.
 It is not a part of the double entry system of
book keeping. It is a result of double entry
system of book keeping. It is only a working
paper.
 It can be prepared on any date.
 It verifies the arithmetical accuracy of posting
of entries from the journal to the ledger.
 It is not a conclusive proof of the accuracy of
the books of accounts since some errors are
not disclosed by the trial balance.

7. Format!
NAME OF ACCOUNT IS
WRITTEN
PARTICULAR DATE OF
PREPRATION
Trial balance of m/s_____ as on ____
PARTICULAR
L/F
DEBIT AMOUNT
CREDIT AMOUNT
ACCOUNT HEAD ONE
---
----
----
ACCOUNT HEAD TWO
---
----
----
ACCOUNT HEAD
THREE
---
----
----
TOTAL
---
DEBIT BALANCES
ARE
WRITTEN
****
COLUMNS ARE TOTALLED
DEBIT=CREDIT
****
CREDIT BALANCES
ARE
WRITTEN

8. PREPARING A TRIAL BALANCE!
 FOR EXAMPLE : we have some ledgers
Dr
Date
CAPITAL A/C
particular
total
---
Date
Particular
Jan 1
To balance
c/d
j/f amount
Cr
j/f
amount
By cash a/c ---
20000
total
20000
By balance
b/d
20000
20000
20000

9. Dr
CASH A/C
Cr
Date
Particular
j/f
Amount Date Particular j/f
Jan 1
To capital
a/c
----
amount
20000
By balance ---c/d
total
To balance
b/d
----
20000
20000
20000
total
20000
----

10.  Now, the capital a/c ledger and cash a/c
ledger would be noted down in a trial
balance.
Trial balance of m/s ______ as on Jan 10,2012
particular
L/f
Debit
credit
Cash a/c
----
20000
----
Capital a/c
----
----
20000
----
20000
2000
Total

11. Limitations!
 Trial Balance only confirms that the total of
all debit balances match the total of all credit
balances. Trial balance totals may agree in
spite of errors. An example would be an
incorrect debit entry being offset by an equal
credit entry. Likewise, a trial balance gives no
proof that certain transactions have not been
recorded at all because in such case, both
debit and credit sides of a transaction would
be omitted causing the trial balance totals to
still agree. Types of accounting errors and
their effect on trial balance are more fully
discussed in the section on Suspense
Accounts.