Trial Balance
Closing The Books
What is a Trial Balance ? A worksheet listing of all the accounts appearing in the general ledger with the dollar amount of the debit or credit balance of each.
Where do we get the information needed to prepare our Trial Balance ? Hopefully, you said from our General Ledger Accounts.
What purpose does a Trial Balance serve ? It provides proof that the total balance of our General Ledger Debit Accounts equal the total balance of our General Ledger Credit Accounts. In other words, total debits and credits are equal.
It does not prove that there were no errors made recording the transactions. Wrong amounts and wrong accounts could have been used in entering the transactions.
Sample Trial Balance
Shabby Computer Systems Trial Balance Worksheet December 31, xxxx | ||
| Account Name / Description | Trial Balance | |
| Debit | Credit | |
Balance Sheet Accounts | ||
Cash | 5500 | |
Accounts Receivable | 25800 | |
Office Supplies Inventory | 1500 | |
Prepaid Insurance | 6000 | |
Inventory for Resale | 10500 | |
Truck | 15500 | |
Accounts Payable | 1000 | |
Other Accruals | ||
Shabby Computer Systems, Capital | 22100 | |
Shabby Computer Systems, Drawings | 24000 | |
Total Balance Sheet Accounts | 88800 | 32100 |
Revenue & Expense Accounts | ||
Consulting Services | 50000 | |
Computer Sales | 100000 | |
Cost of Goods Sold-Computers | ||
Purchases | 70000 | |
Rent Expense | 6000 | |
Utilities Expense | 4800 | |
Office Supplies | ||
Insurance Expense | ||
Vehicle Operation Expense | 3600 | |
Maintenance & Repairs | 2400 | |
Depreciation Expense | ||
Bad Debt Expense | ||
Bank Charges | ||
Advertising Expense | 4500 | |
Professional Fees Expense | 2000 | |
Total Revenue/Expense Accounts | 93300 | 150000 |
| Total All Accounts | 182100 | 182100 |
What's Next ?
Adjusted Trial Balance Worksheet