1. Trial Balance

2. Accounting Cycle: Transaction Occurs Journal entry
General Ledger (t-accounts)
Trial Balance

3. The Rule of debiting and crediting accounts:
Assets + =
Liabilities
Owner’s Equity + - - + - +

4. After each entry, the Ledger should be in BALANCE! (A = L + OE)
Therefore, to check the accuracy of the Ledger, we prepare a TRIAL BALANCE

5. A TRIAL BALANCE is a simple procedure used to find out if the ledger is in balance (A = L + OE)
The debit entries must equal the credit entries, if not, the ledger is “out of balance”

6. For a TRIAL BALANCE, we prepare a heading
Who?
What?
When?
Accounts are listed in order of A, L, OE
Account balances are listed in the correct columns, and the column totals should AGREE!!!!

7. If “OUT OF BALANCE” Re-add the trial balance
Check the figures from the ledger to the trial balance
Recalculate the account balances
Check that the transactions have equal debits and credits

8. Additional ‘Out of balance’
If difference is divisible by 9; transposition error example: 123  132
If difference is a multiple of 10; addition error

9. DEBIT = CREDIT

10. Step 5 of the Accounting Cycle
BALANCE SHEET

11. Homework: start ex. 3 & 5, p. 182-183 (t), p. 120 (wk),
trial balances ex p (t), p (w)
Ex. 4, p. 124 (t), p. 66 (w)
start ex. 5 (Hoystead), p. 125 (t), p (w) – use journal page provided, post to ledger p , complete trial balance p. 66 (w)