Week 1 lesson: Trial Balance

• Trial Balance - lists all the debit and credit balances of the accounts

  from the general ledger.
• Purpose of trial balance - establishes the equality of debit and credit accounts
• Trial Balance of Totals - all accounts in the ledger are listed, and both the debit and credit totals are shown
• Trial Balance of Balances - only the accounts in the ledger that have open balances are listed
• Parts of trial balance

   Heading - Name  the Business Type of financial document being prepared, Trial Balance Accounting period covered (Month, Day, Year) 
• Parts of trial balance

   Body -  Account Titles

  Debit Balances; and

  Credit Balances taken from the ledger
• Errors in trial balance:

  erroneous journalizing

  mathematical mistakes

  erroneous posting

  omissions
• A journalizing error occurs when an incorrect account title is used to record a transaction
• Error in posting - the correct amount to the wrong account; posting the amount to the wrong side of the account;  transposition; and transplacement
• In some cases, the journal entries are accurate, but the amounts are posted to the wrong side of the account

  Posting an amount to the wrong acc
• Transposition – The numbers have been written down or typed in the wrong sequence.
• Transplacement happens when an amount is modified

  due to a misplaced decimal point denoting centavos. It is also

  known as sliding error.
• Mathematical mistakes is a  type of error is usually caused by incorrect debit and credit footing.
• Omissions happen when the transaction was not recorded in the journal; and the journal entry was not posted in the ledger.
• Purpose of trial balance -  serves as a foundation for preparing financial statements in draft form