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According to J.R. Batliboi -“A Trial Balance is a statement, prepared with debit and credit balances of the Ledger Accounts to test the arithmetical accuracy of the books.”
Trial Balance may be defined as a statement which contains balances of all ledger accounts on a particular date.( Generally at the end of the year)
Dual Aspect Concept
Every journal entry debit and credit aspect which further goes into the ledger, subsidiary books as well as cash book. The balances in this account is then taken into Trial Balance which would agree as boththe debit & credit part has been considered. Trial Balance proves only the arithmetical accuracy of posting in the ledger. Trial Balance is a statement, list, worksheet and the result of double entry bookkeeping. But, it is not a part of double entry ofBookkeeping.
FORMAT
TRIAL BALANCE AS AT -
S NO.
Name of Account
LF
Dr. Amount
( Total/Balance)
Cr Amount
Date
Particular
Amount
1
2
3
4
5
6
7
8
9
Mohan started business with cash Deposit in the bank
Furniture purchased for cash Purchased goods for cash
Purchased goods from M/s Ram Narain on credit Goods sold to M/s Ram & Co. for cash
Goods sold on credit to Ramesh Received cash from Ramesh Paid Rentand
Paid Salary
5000
500
200
400
1000
600
300
100
8600
Example
Lf
Dr.
Cr.
Casha/c Dr
To Capital
(Being the amount invested by Mohan in the
business as capital)
Bank A/c Dr.
To Cash Account
(Being the amount paid into bank)
FurnitureA/c Dr.
(Being furniture purchased for cash)
PurchasesA/c Dr.
(Being goods purchased for cash)
To M/s Ram Narain
CashA/c Dr.
To Sales Account
(Being goods sold for cash)
Ramesha/c Dr.
(Being goods sold to Ramesh on credit)
To Ramesh
(Being cash received from Ramesh)
RentA/c Dr.
Salary A/c Dr.
(Being Rent and salary paid)
JF
To Mohan?s Capital a/c To Sales Account
To Ramesh Account
By BankAccount
By Furniture Account By Purchase Account By Rent Account
By Salary Account By Balance c/d
4500
Total
5,900
To Bal b/d
4,500
Particulars
To bal c/d
5,000
By Cash Account
By bal b/d
To cash
By bal c/d
To bal b/d
To Cash
Account
To M/s Ram
Narain
1,000
1400
By Bal c/d
To Bal c/d
By purchase
account
To Sales
By cash
Total Method
The Total Method of Preparing the Trial Balance In this, the total of each side of the account is entered respectively in the debit and credit columns of the Trial Balance. This is known as the Gross Trial Balance.
Trial balance as at 31st March,20XX
s no.
Dr
Cr
Cash Account
5900
Capital Account
Bank Account
Purchase Account
Sales Account
900
Furniture Account
M/s Ram Narain Account
Rent Account
Salary Account
10
Ramesh a/c
Balance Method
The Balance Method of Preparing the Trial Balance In this, balances are entered separately in the debit and credit columns of the Trial Balance. This is known as the Net Trial Balance.
6900
Compound Method
Compound method is the combination of both the methods, total method and balance method. Thus, compound method is also known as total cum balance method
One should note that the agreement of trial balance is not conclusive proof of accuracy. In simple words, in spite of the agreement of the trial balance some errors may remain. These may be of the following types:
There are different terms used to describe the trial balance at different points in time.
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