9C: Trial Balance

• Trial Balance is the listing of the debit and credit balances from the general ledger/T-account.
• The trial balance has the following purposes:

  1. It proves the equality of debit and credit.
  2. It determines nominal accounts to be closed.
  3. It serves as a basis for making draft financial statements.
• The term "TRIAL BALANCE" itself suggests that this statement proves the fundamental concept that debit should equal to credit at all instances.
• DEBIT COLUMN

  • Assets
  • Owner, Drawing
  • Expenses
• CREDIT COLUMN

  • Liabilities
  • Owner, Capital
  • Income
• Arrangement of Account Titles in a Trial Balance

  1. Assets
  2. Liabilities
  3. Capital
  4. Personal/Drawing
  5. Income
  6. Expenses