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Preparing a Trial Balance

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Preparing a Trial Balance

A sample trial balance. Image credit moneyinstructure.com

A sample trial balance. Image credit moneyinstructutor.com

ZIMSEC O Level Principles of Accounts Notes: Preparing a Trial Balance

  • As already said a trial balance is extracted from the ledger accounts by listing all the credit and debit balances that are in the entity’s books at the end of each trading period.
  • The following steps are involved in the extraction and preparation of a trial balance.
  1. For each account in the business’s books e.g. Cash Account, Capital Account etc:
  2. If the total for credit entries is larger then subtract the total of debit balances from the credit total.
  3. Place the difference into the credit column of trial balance.
  4. If the total for the debit entries is larger then subtract the total of the credit balances from the debit total and place the difference onto the debit side of the trial balance.
  5. If the debit and credit sides of an account are equal then the account will not appear in the trial balance.
  • The above procedure is known as balancing accounts.
  • Once you have done this for all the accounts in the business’s books add all the items in the debit column and put the total underneath the column.
  • Obtain a total for the credit column as well and write it down.
  • By convention the Debit column is onto the left and the credit column to the write when you prepare a trial balance.
Rent PayableXX
Rent ReceivableXX
Land and BuildingsXX
Motor VehicleXX
Debtors/Accounts ReceivableXX
Creditors/Trade ReceivablesXX
Cash at Bank/BankXX

To access more topics go to the Principles of Accounts Notes page.

By | 2017-01-17T11:17:53+00:00 September 4th, 2015|Notes, Ordinary Level Notes, Principles of Accounts Notes|0 Comments

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He holds an Honours in Accountancy degree from the University of Zimbabwe. He is passionate about technology and its practical application in today's world.

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