How to Prepare a Trial Balance from Ledger Balances?

Prepare Trial Balance from Ledger Balances

Preparing a trial balance from ledger balances is the next step of posting and balancing ledger accounts. The trial balance is a statement of debit and credit balances that are extracted from ledger accounts on a specific date.

The trial balance is prepared with two different techniques: Total Method and Balance Method.

According to the Total Method, the sum 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.

Related Topic – What is Adjusted Trial Balance?

Prepare a trial balance as on 31st Dec 2013 by filling in the debit and credit columns accordingly for each ledger balance mentioned below.

 Account  Balance  Account  Balance
 Capital  70,000  Carriage Inwards  1500
 Opening Stock  20,000  Carriage Outwards  2000
 Salaries  10,000  Plant & Machinery  17,000
 Returns Inward  500  Investments  7000
 Returns Outward  6000  Sales  70,000
 Purchases  80,000  Patents  10,000
 Sales Ledger Control  7000  Furniture  8000
 Purchase Ledger Control  40,000  Discount Allowed  1000
 Cash in Hand  15,000  Misc. Receipts  4000
 Cash at Bank  11,000  Closing Stock   9000



Trial Balance From the Above Ledger (31st Dec 2013)

 Particulars  Debit  Credit
 Capital    70,000
 Opening Stock  20,000  
 Salaries  10,000   
 Returns Inward  500  
 Returns Outward     6000
 Purchases  80,000  
 Sales Ledger Control  7000   
 Purchase Ledger Control    40,00 
 Cash in Hand  15,000  
 Cash at Bank  11,000   
 Carriage Inwards  1500   
 Carriage Outwards  2000   
 Plant & Machinery  17,000   
 Investments  7000  
 Sales    70,000
 Patents  10,000  
 Furniture  8000  
 Discount Allowed  1000   
 Misc. Receipts    4000
 Total  1,90,000  1,90,000

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
 Assets  Debit
 Liability  Credit
 Capital  Credit
 Revenue  Credit
 Expenses  Debit
 Drawings  Debit
 Contra Asset  Credit
 Contra Liability  Debit



Short Quiz for Self-Evaluation



>Read What is a Contra Account?


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