Trial Balance

What is Trial Balance and how is it prepared ?

A Trial Balance is a summarized statement/list of Closing Balances of all the Ledger Accounts,which is prepared mainly in the aim to draw Manufacturing,Trading,Profit & Loss Account/Income & Expenditure Account and Balance Sheet etc.

Trial Balance is prepared after Balancing all the Ledger Accounts at the end of a particular period or date.

Trial Balance follows the Rules of Double Entry System of Book-keeping. Hence,the Debit total amount and Credit total amount should be equal.

If the Debit total amount and Credit total amount doesn't match,one should re-verify and try to rectify the errors.

Sample format of Trial Balance.

A Trial Balance mainly consists of five columns.

1. Serial Number(Sl. No.) : In this column serial number of the Ledger Accounts are written. One can write "Sl.No" in place of Serial Number for consuming low space and time.
   

2. Ledger Account/Head of Account : Name of the Ledger Accounts are written in this column.
   

3. Ledger Folio(L.F) : Ledger page numbers or Folio numbers are written in this column.
   

4. Debit Balance : This is the column for mentioning amount of the Ledger Accounts with Debit Balance. One can write "Debit or Dr." in place of Debit Balance.
   

5. Credit Balance : This is the column for mentioning amount of the Ledger Accounts with Credit Balance. One can write "Credit or Cr." in place of Credit Balance.

For more understanding on Trial Balance,Let's see the below mentioned sample format/example which is extracted from Ledger Account Balances of M/s.Surya Electronic Centre,Cuttack,Odisha as on date 31/03/2021.

Ledger Balances as on date 31/03/2021

Cash A/c    ₹221550.29 Dr.

Capital A/c    ₹300000 Cr.

State Bank of India A/c    ₹10000 Cr.

Purchases A/c    ₹119642.86 Dr.

Sales A/c    ₹77857.43 Cr.

Satyam Enterprises A/c    ₹25000 Dr.

Adyasha Trading A/c    ₹20000 Cr.

Carriage A/c    ₹1400 Dr. (paid towards purchase of Goods)

Wages A/c    ₹1200 Dr. (Indirect Wages)

Salary A/c    ₹5000 Dr.

Telephone Charges A/c    ₹850 Dr.

Furniture A/c    ₹10000 Dr. 

Computer A/c    ₹20000 Dr.

IGST A/c    ₹5357.14 Dr.

CGST A/c    ₹1071.43 Cr.

SGST A/c    ₹1071.43 Cr.

Trial Balance drawn from the above ledger balances of M/s.Surya Electronic Centre,Cuttack,Odisha is given below.

This is a complete Trial Balance which satisfies the Rules of Double Entry System of Book-Keeping i.e Debit Total must be equal to Credit Total.

Here, Debit total amount is ₹410000.29 and

Credit total amount is ₹410000.29

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Related Articles :

Types of Account

Double Entry System of Book Keeping

Journal 

Ledger 

Trading and Profit & Loss Account

Balance Sheet

Bank Reconciliation Statement