Trial Balance
• A trial balance is a listing of the account
balances in a ledger
• A trial balance is normally performed once
a month at the end of the month
• A trial balance is used to ensure that the
ledger is always in balance, just as a
balance sheet should be balanced so
should a ledger
• For a trial balance the accounts of a
ledger are listed in a column.
• The accounts with debit balances (assets)
are totalled and compared to the total of
the accounts with credit balances
(liabilities and OE)
• If the two sums are the same then the
ledger is in balance, if they do not agree
then the ledger must be out of balance
• How to take off a trial balance
• 1) title; who, what, when
– Company name, trial balance, date
• List the asset accounts (debit balances), then list
•
•
liabilities and owners equity (credit balances)
Total the debit (left column) and credit (right
column) at the bottom there should be a single
line above the total and a double underline
Column totals must agree
Correcting an incorrect trial balance
• 1) Re-add the trial balance columns
• 2) Check the numbers in the trial balance
to the totals in the ledger
• 3) Recalculate the account balances in the
Ledger
• 4) check that the accounting entries in the
ledger are balanced transactions
Review questions pg 104
Complete chapter 4.4 review Questions and
section exercises
Once you have your quiz back check your
answers to the answers provided in First
Class
Start on Chapter 4.5 Section Exercises pg
107, 1-3
Section Review Questions
1. Because A=L+OE and all Assets have debit
2.
3.
4.
5.
balances and Liabilities and Owners Equity
have Credit balances the totals will be equal
List all accounts from the ledger on the trial
balance sheet, total the debits and credits,
compare the totals
(this will not be on any test)
It is important to balance the ledger to insure
that all work is accurate in accounting
Once a month
• 6) It is kept on file
• 7) A trial balance should be kept on hand
until an audit is preformed or for one year
• 8) If the ledger is not balanced after
completing all correction steps then you
have made an error in correcting
• 9) Re-add, check the ledger figures,
recalculate ledger totals, check transaction
balances