After the posting process to the ledger and auxiliary books and the balance of the accounts, the accounts are then collected with their balances by preparing a statement called the trial balance statement.
Trial Balance
It is a statement that contains within it all the accounts with their final debit and credit balances, which are obtained from the ledger, and it is required that the total of the debit side be equal to the total of the credit side in order for us to judge its correctness in terms of balance.
It is a statement that contains within it all the accounts with their final debit and credit balances, which are obtained from the ledger, and it is required that the total of the debit side be equal to the total of the credit side in order for us to judge its correctness in terms of balance.
The importance of preparing a trial balance:
Ensure the balance of accounts and discover errors that affect its balance to be corrected before preparing the financial statements.
It gives a summary of the account balances during a specific period that benefits the decision-makers in the establishment, and it is preferable that the trial balance be prepared every month end
The trial balance is the starting point for preparing the financial statements.
Forms of trial balance
Trial balance balances
It is a statement that contains the balances of the accounts already in the ledger, and it looks like this:
Ensure the balance of accounts and discover errors that affect its balance to be corrected before preparing the financial statements.
It gives a summary of the account balances during a specific period that benefits the decision-makers in the establishment, and it is preferable that the trial balance be prepared every month end
The trial balance is the starting point for preparing the financial statements.
Forms of trial balance
Trial balance balances
It is a statement that contains the balances of the accounts already in the ledger, and it looks like this:
Total trial balance:
It is a statement that contains the sum of the debit and credit transactions that occurred for each of the accounts in the ledger, and it takes this form:
It is a statement that contains the sum of the debit and credit transactions that occurred for each of the accounts in the ledger, and it takes this form:
Trial balance in totals and balances:
It is a statement that contains the debit and credit totals and the debit and credit balances for each of the accounts in the ledger.
It is a statement that contains the debit and credit totals and the debit and credit balances for each of the accounts in the ledger.
Note: Accounts of a debit nature have mostly debit balances, which are the asset accounts, the personal withdrawals account, and the expense account, and the accounts of a credit nature are mostly credit, which are the liabilities accounts, the capital account, and the revenues, as we explained previously in the lesson of the debtor and the credit.
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