Trial Balance

Trial Balance

• The information for ledgers comes from balance sheets.-This means it is already in balance.

• As you make changes to the Ledger, it is possible that mistakes are made.

• To see if you made any mistakes, you should use a Trial Balance.

Trial Balance

• Add up all of the debit and credit balances. If they agree, the ledger is in balance.

• If they DO NOT agree, the ledger is out of balance.

Trial Balance

How to Take a Trial Balance

1

2 2, 3

4

5

Trial Balance

• Using a calculator:

-Add up the debits and subtract the credits. If the calculator says 0, the ledger is in balance.-If the calculator does not have 0 on it, the ledger is out of balance.

Importance of the Trial Balance

• Trial Balances are important. Mistakes should be identified early.

• Accountants should make sure that their ledger is always in balance.

• Computers help with this.

Trial Balance out of Balance

• What happens if the Trial Balance becomes out of balance?

• If it is not in balance, there is at least one error.-Account identified wrongly,-Addition or subtraction done wrong,-Missing a step.