Trial balance is a statement of debit and credit balances extracted from the ledger, with a view to test the arithmetical accuracy of the books. One of the basic principles of double-entry is that for every debit there must be a corresponding credit. Therefore the equality of debits and credits posted in ledger should be verified at the end of each accounting period. If the debit and credit sides of trail balance are equal then it indicates that the books are arithmetically accurate and both the aspects of each transaction are recorded.


Steps in Preparing Trial Balance


  • Find out the closing balance of each ledger account.


  • If the ledger account shows debit balance, then take this debit balance to the debit column   of trial balance. Whereas, if the ledger account has credit balance then transfer this balance to the credit column of trial balance.


  • Add total amounts in each column.


  • Compare the totals of each column.


Fore Example: Robert purchased goods on credit for $4000.


Now the journal entry will be:

Purchases                     4000
             A/C Payable              4000


Similarly Ledger account will be:


                                        Purchases Account






                                                A/C Payable







Note: B/D refers to brought down whereas C/D refers to carried down. We have to consider C/D balance while preparing a trial balance.


Trail Balance will be in the form given below:




Following is the complete trail balance of Kramer Trading Company. In order to see the journal entries of the given trail balance please click here. For ledger accounts click here.


Kramer Trading Company
Trial Balance
For the Month Ended 31 January 2010



In order to see the Income Statement of above trail balance, please click here.

Get our Newsletters

Receive The Latest Posts Directly To Your Email - It's Free!!