Archive | Trial Balance

When is a Trial Balance Prepared? | Accounting

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 […]

Difference between Trial Balance and Balance Sheet

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 […]

Rectification of Errors that Affect and Do not Affect Trial Balance

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 […]

Procedure for Detecting Errors in Trial Balance

Read this article to learn about the seven steps for detecting errors in trial balance. Step 1: Check the total of debit and credit columns of the trial balance. To arrive at the exact total, one should go through opposite directions viz., from top to bottom and bottom to top or vice-versa. Step 2: Re-check […]

How to Prepare Trial Balance of an Account?

Here we detail about the three methods for preparing trial balance of an account, i.e.,(I) Balance Method, (II) Total Method, and (III)Balance and Total Method. (I) Balance Method: Under this method, debits and credits balances are to be extracted from all ledger accounts, including cash book and shown in this schedule. The following steps shall […]

Trial Balance: Meaning, Objectives and Defects

Let us make in-depth study of the meaning, objectives and defects of trial balance in accounting.  Meaning of Trial Balance: Trial Balance is a statement of debit and credit balances taken out from all ledger accounts including cash book. The golden rules that “Accounting equation remains balanced all the time” and “For every business transaction […]

shopify traffic stats