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What is the procedure for preparing a trial balance?

Author:
Harold Averkamp, CPA, MBA

Definition of a Trial Balance

A trial balance consists of the following information:

  • The title of each general ledger account that has a balance
  • To the right of the account titles are two columns for entering each account’s balance. One column is headed Debit and the other column is headed Credit
  • Each account’s balance is listed in the appropriate column
  • After all of the account balances are entered, each column is summed
  • The total of the debit column should be equal to the total of the credit column

Example of a Trial Balance

Today’s accounting software can print a trial balance at the click of a mouse. Further, a computerized accounting system has eliminated the many math and clerical errors that had occurred with a manual accounting system.

Of course, a trial balance that has the total debits equal to the total credits does not mean that the general ledger is free of errors. For instance, recording a debit entry into the Equipment account instead of recording the debit in the Equipment Repairs Account will not be uncovered by the trial balance.

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About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

Learn More About Harold

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