When ledger postings are completed and accounts are balanced, the next phase in the accounting cycle is preparation of a Trial Balance. This phase helps to verify whether sum of the debit balances is equal to the sum of the credit balances. This is an essential phase before proceeding further to prepare the final accounts at the end of accounting [...]
Read this article to learn about the difference between trial balance and balance sheet. Trial Balance: 1. Trial balance is a schedule showing equality of all debits and credits. 2. The purpose of preparation of trial balance is to verify whether all debits balances are equal to the all credit balances. 3. Balances of all debits and credits are to [...]
Here we detail about the rectification of errors that affect and do not affect trial balance. I. Rectification of Errors Not Affecting the Trial Balance (Two Sided Errors): Errors which do not affect the trial balance are also known as two sided errors. These errors are committed in two or more accounts. Following are some example of such errors: (a) [...]