ACC Trial Balance

Trial Balance The trail balance can be defined as the list of all balances extracted from the ledger accounts at a given point in time drawn up to test the arithmetic accuracy of accounting entries. The debit balances are shown under the debit column and the credit balances under the credit column. As has been mentioned, the total of the debit balances should agree with the total of the credit balances if the double entry principle have been correctly applied. The failure of the totals to agree is therefore an indication of error(s) in the entries. Extraction of Trial Balance is the final stage of a Book-keeper’s work, from where an accountant takes over. A Book-Keeper is to record transactions in the books of original entries, post the transactions to relevant ledger accounts, balance off the accounts at the accounting period and extract a trail balance. An Accountant is to use the trial balance, together with additional information to it, and prepare financial statement or final accounts. If the double-entry principle has been completely and correctly applied, it is obvious that the total of all the debit entries will be equal to the total of all the credit entries. By extension, the total of the debit balances should equal to the total of the credit balances. The list drawn up showing the balances extracted from the accounts in the ledger is known as a trial balance. The debit balances are shown under the debit column and the credit balances are shown in the credit column. As has been mentioned, the total of the debit balances should agree with the total of the credit balances if the double-entry principle have been correctly applied. The failure of the totals to agree is therefore an indication of error(s) in the entries.