1. Section 3Preparing a Trial Balance What You’ll Learn  The purpose of a trial balance.  How to prepare a trial balance.  How to identify and locate trial balance errors. What You’ll Learn  The purpose of a trial balance.  How to prepare a trial balance.  How to identify and locate trial balance errors.

2. Why It’s Important To present accurate financial statements, the accounts must be in balance. The purpose of a trial balance is to prove that the general ledger is in balance. Why It’s Important To present accurate financial statements, the accounts must be in balance. The purpose of a trial balance is to prove that the general ledger is in balance. Section 3Preparing a Trial Balance (con’t.) Key Terms  proving the ledger  trial balance  transposition error Key Terms  proving the ledger  trial balance  transposition error  slide error  correcting entry  slide error  correcting entry

3. The Fifth Step in the Accounting Cycle: The Trial Balance Section 3Preparing a Trial Balance (con’t.)  A formal way to prove that debits equal credits is to prepare a trial balance.  Prepared on two-column accounting stationery.  Account numbers are listed in the far left column.  A formal way to prove that debits equal credits is to prepare a trial balance.  Prepared on two-column accounting stationery.  Account numbers are listed in the far left column.

4. The Fifth Step in the Accounting Cycle: The Trial Balance (con’t.) Section 3Preparing a Trial Balance (con’t.)  Account names are listed in the next column.  Debit balances are entered in the first amount column.  Credit balances are entered in the second amount column.  Account names are listed in the next column.  Debit balances are entered in the first amount column.  Credit balances are entered in the second amount column.

5. The Fifth Step in the Accounting Cycle: The Trial Balance (con’t.) Section 3Preparing a Trial Balance (con’t.)