CHAPTER FIVE
The
Trial
Balance
5-3
THE TRIAL BALANCE
Objectives:
1. Prepare a trial balance.
2. Locate accounting errors in the trial
balance and ledger accounts.
3. Correct accounting errors in the trial
balance and ledger accounts.
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5-4
Preparing the Trial Balance
• The first step is to pencil foot each
account.
• Next, list the accounts and their
balances in pencil.
• Debits and credits are totaled.
• If total debits equal total credits the trial
balance is in balance.
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5-5
Finding Errors in the Trial Balance
and the Accounts
• Total the trial balance columns
again to make sure that the
addition is correct.
• Check to see whether any
account balance has been
omitted from the trial balance.
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5-6
Finding Errors in the Trial Balance
and the Accounts (continued)
•Compare the figures on the trial
balance with the account
balances to verify that the correct
amounts have been listed on the
trial balance and that they were
placed in the proper money
columns.
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5-7
Errors Not Revealed by the Trial
Balance
•Omitting a transaction completely.
•Debiting or crediting the wrong
accounts.
•Entering the amount of a transaction
incorrectly.
•Entering the same transaction twice.
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Accounting Fundamentals, 7/e
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5-8
Correcting Errors in the Trial
Balance and the Accounts
•If the error is in pencil you may
erase it and replace with other
penciled figures.
•If the error is in ink you must draw a
single, ruled-line through the error
and write the correct figure above it.
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5-9
Correcting Errors in the Trial
Balance and the Accounts (continued)
•If the wrong account is debited or
credited, then an entry should be
recorded to correct the error.
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5-10
Accounting Terminology
•Accounting errors
•Trial balance
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Chapter Summary
• The accuracy of the accounts must
be checked before financial reports
are prepared.
• The procedure for checking the
equality of debits and credits in the
accounts is called taking a trial
balance.
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5-12
Chapter Summary (continued)
• The first step in taking a trial balance is
to find the balances of the accounts.
• The next step is to list the accounts and
their balances.
• Then the debits and credits are totaled.
• The total of the debits should be equal
to the total of the credits.
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Accounting Fundamentals, 7/e
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5-13
Chapter Summary (continued)
• The accounts are listed on the trial balance
form in the order they appear in the ledger.
• If the trial balance is in balance, it is probable
that the accounts in the ledger are correct. If
the total debits and the total credits are not
equal, the trial balance and the accounts must
be checked to find and then correct the error.
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Accounting Fundamentals, 7/e
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5-14
Topic Quiz
Answer the following true/false questions:
1. The procedure for checking the equality
of debits and credits in the accounts is
called taking a trial balance.
TRUE
2. If debits equal credits, it is probable
that the trial balance is correct.
TRUE
3. If the trial balance equals, there is no
chance of an error.
FALSE
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Accounting Fundamentals, 7/e
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5-15
Investigating on the Internet
Sources of information about trial
balances are usually not found on
corporate or business websites.
As a research assignment, try to find a
business website that shows trial balance
information. If you find one, why is the
information there? If you can not find
one, why is the information not there?
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5-16
3. If the trial balance equals, there is no
chance of an error.
FALSE
The wrong accounts may
have been used in a
transaction.
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(Return to Topic Quiz)
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