we prepare ledger accounts. In the same way. After balancing ledger accounts. If the credit side exceeds debit side. we would like to check the arithmetical accuracy of our accounts and for this purpose TRIAL BALANCE is prepared. . excess of debit side of an account over its credit side shows debit balance. it is known as credit balance. Journal proper and subsidiary books record all business transactions originally. These ledger accounts have a debit and credit sides.All the transactions of financial nature are recorded in the books of accounts. The ledger accounts are balanced. With the help of subsidiary books and journal.

. Trial balance is a statement containing balances of all ledger accounts of a business concern on a particular date.Trial Balance is a statement prepared with Debit and credit balances of the ledger accounts to test the arithmetical accuracy of the books.

The trial balance is prepared on specific date. The difference between the debit and credit side of the trial balance points out that certain mistakes have been committed somewhere. . In case of the debit and credit side of the trial balance are equal .we assume that the principles of “Double Entry System” and the assumptions of accounting equation have been observed. The total of the debit and credit column of the amount must be equal.. This is why we use the word “as on….” with its heading.  Trial balance contains the list of all ledger accounts including cash account Trial balance may be prepared with the balances or totals or balances and totals of ledger accounts.

 Basis for preparing final accounts:.OBJECTIVES OF TRIAL BALANCE  Test of arithmetical accuracy:.the ultimate end of maintaining books of accounts is to ascertain the result of the business in term of profit & the value of different assets &liabilities. It presents the name of ledger accounts & the amount of their debit & credit account . so acts as a source statement for preparing final accounts. It helps to prepare profit & loss accounts 7 balance sheet . It would have been very difficult to access the position of different ledger accounts from subsidiary books & ledger accounts. the debit & credit total of the trial balance must tally  Summarized information of Ledger accounts:-it contains a list of all ledger account. .  Useful for making adjustments:.while making final accounts certain adjustments regarding closing stocks. outstanding & prepaid expenses. While identifying items for adjustments .we will have to study the information furnished in trial balance.If direct posting has been made from subsidiary books and ledger account & correct figures have been recorded & copied . unearned income are to be met.

PARTICULARS L. AMOUNT ( in rupees) DEBIT CREDIT .F.

F.PARTICULARS L. (ledger folio) AMOUNT COLUMN DEBIT COLUMN CREDIT COLUMN .

 Total and balance method. .  Total Method. The following methods can be used for preparing trial balance.• There are three methods of preparing trail balance.  Balance Method. The total of both the debit and credit column of the trail balance equal in all the methods.

Cont. In the same way. At the end of certain period ledger account is balanced. Balance Method: Trial balance is prepared with the balance of ledger accounts.…. Every ledger has got the debit and the credit side. excess of total of debit side of an account over its credit side is known as debit balance and which is debited .. excess of credit side of account over its debit side shows credit balance is credited .

.Cont…… Total Method: The total of debit and credit side of every account is written in the debit and credit column. If it is not equal the errors must me rectified. Both the debit and the credit must be equal.

Cont…… Total and balance method: This method presents both the balance and total method in the same trail balance. The totals of each method will be equal . The amount column is divided between total and balance methods. The total of debit and the credit must be equal.

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