BTHM-Trial Balance Financial Accounting-Topic 4
Topic 4: Trial Balance
Definition: The trial Balance is a list of balances extracted from all the accounts arranged in such a way
that the debit balances are listed on one side and the credit balances on the other side. It is important to
note that the trial balance is not part of the double entry system; it is merely a list of balances drawn to
check the arithmetical accuracy of the book keeping entries. I t does, however, serve two purposes:
1. It checks the accuracy of the double entry transactions.
2. It facilitates the preparation of the financial statements of the business.
Example
The following trial balance was extracted on 30 June 2012 from the books of Star – a ladies hairdresser:
Trial Balance as on 30 June 2012
Dr Balances Cr Balances
(Rs) (Rs)
Capital Account 10,000
Drawings 400
Cash 10,300
Rent 500
Wages 200
Equipment 2,000
Sales 1,500
Debtors 100
Creditors 2,000
13,500 13,500
Work Example 1
Refer to work example 2 set in Topic 2 (ABC business), prepare a Trial Balance as on 31 January 2012.
1
Topic 4: Trial Balance
Definition: The trial Balance is a list of balances extracted from all the accounts arranged in such a way
that the debit balances are listed on one side and the credit balances on the other side. It is important to
note that the trial balance is not part of the double entry system; it is merely a list of balances drawn to
check the arithmetical accuracy of the book keeping entries. I t does, however, serve two purposes:
1. It checks the accuracy of the double entry transactions.
2. It facilitates the preparation of the financial statements of the business.
Example
The following trial balance was extracted on 30 June 2012 from the books of Star – a ladies hairdresser:
Trial Balance as on 30 June 2012
Dr Balances Cr Balances
(Rs) (Rs)
Capital Account 10,000
Drawings 400
Cash 10,300
Rent 500
Wages 200
Equipment 2,000
Sales 1,500
Debtors 100
Creditors 2,000
13,500 13,500
Work Example 1
Refer to work example 2 set in Topic 2 (ABC business), prepare a Trial Balance as on 31 January 2012.
1
