1. By Myrna Kopeechuk

2. Intended Audience Adult Learners who are: Adult Learners who are: Students of Basic Accounting Theory Course at the University College of the North. Students of Basic Accounting Theory Course at the University College of the North. Small business owners preparing financial statements for their business. Small business owners preparing financial statements for their business. Individuals keeping track of their personal spending. Individuals keeping track of their personal spending.

3. What is a Trial Balance? A Trial Balance is a list of the balance of each General Ledger account. A Trial Balance is a list of the balance of each General Ledger account. The balances are totaled to confirm that the total debits equal the total credits. The balances are totaled to confirm that the total debits equal the total credits. A Trial Balance is completed at the end of a fiscal period. A Trial Balance is completed at the end of a fiscal period.

4. Why is a Trial Balance used? To prove the equality of the total debits and credits in the General Ledger To prove the equality of the total debits and credits in the General Ledger To provide a listing of all the account balances in the General Ledger To provide a listing of all the account balances in the General Ledger To provide a basis for the preparation of financial statements (Income Statement and Balance Sheet) To provide a basis for the preparation of financial statements (Income Statement and Balance Sheet)

5. The Trial Balance is the 4 th step of the Accounting Cycle

6. An Example of a Trial Balance

7. Preparing a Trial Balance Step One Step One Write the Trial Balance heading at the top Write the Trial Balance heading at the top The heading consists of 3 lines The heading consists of 3 lines The name of the business The name of the business The words “Trial Balance” The words “Trial Balance” The date The date

8. Preparing a Trial Balance Step 2 Step 2 Enter the following for each General Ledger account. Enter the following for each General Ledger account. The account name The account name The balance The balance If the balance is a debit, enter in the left column If the balance is a debit, enter in the left column If the balance is a credit, enter in the right column If the balance is a credit, enter in the right column

9. Preparing a Trial Balance Step 3 Step 3 Draw a single line under each amount column to indicate that the columns will be added Draw a single line under each amount column to indicate that the columns will be added Step 4 Step 4 Add each amount column. Write the totals on the first line under the single ruling. Add each amount column. Write the totals on the first line under the single ruling. Step 5 Step 5 Indicate that the Trial Balance is correct by drawing a double line under the totals. Indicate that the Trial Balance is correct by drawing a double line under the totals.

10. How to Check for Errors StepProblemThings to Do 1If totals are not correctCheck addition 2Find the difference of the two columnsLook for the amount of the difference 3Divide the difference by 2Check in the ledger for the amount (if the difference is divisible by 2, an amount may have been listed on the wrong side) 4Divide the difference by 9Check figures (if the difference is divisible by 9, figures may have been transposed) 5Compare balances on the Trial Balance with ledger accounts Figures may have been entered incorrectly

11. A Trial Balance is complete when the debit column balances with the credit column. Both sides must be equal.

12. Created for the students of Basic Accounting Theory KC MGT 1200