Whenever you attempt a question in arithmetic you try to verify whether your answer is correct or not. If you attempt to solve any other type of problem you want to ensure that it has been correctly solved. For this you try to find out some ways or means. Similarly an accountant also wants to be sure that the ledger accounts he/she has prepared are correct in respect of amount, side, balance, etc. To check the accuracy of posting in the ledger a statement is prepared. This statement is called Trial Balance. You also know that accounts are prepared by applying double entry system. According to this system every debit of a transaction has corresponding credit for the same amount. Hence the total of debit balances of different accounts in the ledger must be equal to the total of the credit balances in the remaining accounts, provided transactions have been correctly posted in the ledger. A statement is prepared containing these balances with two columns i.e. debit column containing debit balances and credit column containing credit balances and the debit column total is compared with credit column total.If the columnar totals are same it implies that ledger accounts are arithmetically accurate.
OBJECTIVES
After studying this lesson you will be able to :
- state the meaning of Trial Balance;
- explain the objectives of preparing Trial Balance
- prepare a Trial Balance as per the format;
- identify the need for a Suspense A/c in case the Trial Balance does not
- tally;
- infer the possibility of errors even if the Trial Balance tallies.
Posts
Comment Policy : We invite you to comment on our posts, as long as they are respectful, to the point and approving. We do not perform pre-moderation of comments. However, in order to keep this site clean and useful, we reserve the right to remove any comment that is not in accordance with our Comment Policy.