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Meaning of Trial Balance

A trial balance is a statement showing the summary of balances of all accounts in the ledger. Trial balance is an important statement in the accounting process. It shows final position of all accounts and helps in preparing the final statements. The task of preparing the statements is simplified because the accountant can take the account balances from the trial balance instead of looking them up in the ledger.


Trial Balance of......as on March 31, 2005

Account Title


Debit Amount

Credit Amount





Fig. 6.1 showing format of Trial Balance

It is normally prepared at the end of an accounting year. Though, an organisation may prepare a trial balance at the end of any chosen period, i.e. monthly, quarterly, and half yearly or annually depending upon its requirements.


In order to prepare a trial balance following steps are taken:
  • Ascertain the balances of each account in the ledger.

  • List each account and place its balance in the debit or credit column, as the case may be. (If an account has a zero balance, it may be included in the trial balance with zero in the column for its normal balance).

  • Calculate the total of debit balances column.

  • Calculate the total of the credit balances column.

  • Verify that the sum of the debit balances is equal the sum of credit balances. If it doesn't tally, it indicates that there are some errors. Thus we have to check the correctness of the balances of all accounts. It may be noted that all assets expenses and receivables account shall have debit balances whereas all liabilities, revenues and payables accounts shall have credit balances (refer figure 6.2).

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