Trial Balance from Ledger Balances
Preparing a trial balance is the next step to posting and balancing ledger accounts. Trial balance is a statement of debit and credit balances that are extracted from ledger accounts on a specific date.
Trial balance is prepared with two different techniques: Total Method and Balance Method.
According to the Total Method, total of debits and credits of every account is shown in the trial balance, i.e. both debit and credit totals are recorded in the trial balance. On the other hand, according to the Balance Method, only the Net balance which is the difference between credit and debit total is transferred and recorded.
Prepare a trial balance as on 31st Dec 2013 by filling in the debit and credit columns accordingly for each ledger balance mentioned below.
|Opening Stock||20000||Carriage Outwards||2000|
|Salaries||10000||Plant & Machinery||17000|
|Sales Ledger Control||7000||Furniture||8000|
|Purchase Ledger Control||40000||Discount Allowed||1000|
|Cash in Hand||5000||Misc. Receipts||4000|
|Cash at Bank||3000||Closing Stock||9000|
Trial Balance From the Above Ledger (31st Dec 2013)
|Sales Ledger Control||23000|
|Purchase Ledger Control||42000|
|Cash in Hand||7000|
|Cash at Bank||12000|
|Plant & Machinery||15000|
The way a balance is transferred to either debit or credit side of a trial balance depends on the nature of that account, below is the table showing the relationship between types of accounts and their usual balances.
|Type of Account||Usual balance|