trial balance check
Answers
Answer:
A trial balance is a bookkeeping worksheet in which the balance of all ledgers are compiled into debit and credit account column totals that are equal. A company prepares a trial balance periodically, usually at the end of every reporting period.
Answer:
. Calculate the Balances of Each of the Ledger Accounts
Business transactions are first recorded in the form of journal entries following the basic accounting principles. These journal entries then go into the ledger accounts involved in the various business transactions.
. Record Debit or Credit Balances in Trial Balance
The remaining debit or credit balances in various accounts of ledger as ascertained above are then recorded in the Trial Balance. The balances of each of the accounts of ledger are recorded in the debit or the credit columns as the case may be.
. Calculate Total of The Debit Column
Ascertain the total of the debit column. This is done after recording all the debit balances of the various accounts of ledger put into debit column of Trial Balance.
Calculate Total of The Credit Colum
Ascertain the total of the credit column. This is done after recording all the credit balances of the various accounts of ledger put into credit column of Trial Balance.
Check if Debit is Equal To Credit
Finally, you need to check if the total of the debit column matches the total of the credit column. As specified earlier, trial balance is prepared to check the accuracy of the debit and credit balances of various accounts of ledger. Both the debit and credit columns of the Trial Balance must tally since every debit has every credit. However, it is an indication that there were some errors made while recording transactions in ledger or trial in cases where they are not equal.
You must note that as per the accounting principle:
All assets, expenses and receivables must have debit balances and all
Liabilities, incomes and payables must have credit balances
Explanation: