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Objectives of Preparing Trial Balance

The following are the objectives of trial balance

  • To ascertain the arithmetical accuracy of the ledger accounts: The trial balance provides a useful check upon the ledger postings. If a trial balance tallies, it is proved that the posting to the ledger accounts is correct. In other words. It ensures that both the aspects of each transaction have been posted into the ledger.
  • To help in the detection or location of errors: If a trial balance does not tally, it indicates that some errors have occurred and the accountant will then proceed to locate such errors.
  • To obtain a summary of the ledger accounts: A Trial Balance serves as a summary of all the ledger accounts. Scanning the Trial Balance enables one to know the assets, liabilities, expenses, incomes etc.
  • For the preparation of Final Accounts: As the Trail Balance contains the list of all the ledger accounts, it provides a basis for further processing of accounting date i.e., preparation of final accounts namely Trading and Profit & Loss Account and a Balance Sheet.

Format

 

Trial balance as on .....................

 

Particulars

Debit ()

Credit ()

Account Head 1

Account Head 2

Account Head 3

Account Head 4

xxx

xxx

xxx

xxx

xxx

xxx

xxx

xxx

Total

xxxx

xxxx





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