Trial balance is a list of ledger accounts balances, showing debit balances and credit balances, separately on a certain date. Trial balance is only a statement not an account. As we learned, every transaction has equal debit and credit aspects so that the trial balance possesses equal debit and credit balances.

Trial balance preparation

You need to arrange all ledger balance accordance with its balances. All debit balance ledger should be on debit column and credit balance should be on credit column and finally total both the sides. The total of both sides must be equal. If it doesn’t match; something went wrong in ledger posting or ledger balancing.

A trial balance tests the arithmetical accuracy of ledger posting, by ensuring both sides are equal. If both sides are equal we say trial balance is tallied or agreed. However tallying trial balance cannot ensure the 100% accuracy. There may be errors like compensating error which can be find out only after scrutinizing ledger posting .We will discuss trial balance and errors on next chapter.

Here is the format of a typical trial balance using previous example



Let’s explain items in the table

Ledger: Many are using several Ledger books, for different types of transactions, like a ledger book for sales, ledger book for debtors, purchases etc. If you are using different ledger the name should be entered here

Account: Each and every account balance in a ledger book

Folio No: The Page number of Ledger book in which the account balance exists.