1. Introduction
The Trial Balance is the next step after preparing all Ledger accounts.
It is a statement that lists the closing balances of all accounts on a specific date.
The purpose is to check the arithmetical accuracy of the books of accounts — meaning Debit and Credit must be equal.
Think of it like balancing a scale:
- Left side (Debit) must equal Right side (Credit).
- If they don’t, there is an error in recording or posting.
2. Definition
A Trial Balance is a statement that shows the Debit and Credit balances of all Ledger accounts on a given date, ensuring that total Debits = total Credits.
Formula:
Total Debit = Total Credit
3. Features of a Trial Balance
- Prepared after Ledger is completed.
- Shows only balances, not full transactions.
- Helps in detecting errors of posting or totaling.
- Acts as the basis for preparing the Financial Statements.
Key Points: Trial Balance
- A Trial Balance is prepared after Ledger accounts are completed.
- It shows only balances, not full transactions.
- Purpose → Check Debit = Credit (arithmetical accuracy).
- If totals don’t match → Errors exist (posting / totaling mistakes).
- Acts as the basis for preparing Financial Statements.
- Formula: Total Debit = Total Credit.
- Learning Outcome → You can now:
- List Ledger balances correctly.
- Detect errors when totals differ.
- Balance the Trial Balance before moving to Final Accounts.
4. Structure / Format
| Account Title | Debit (Rs.) | Credit (Rs.) |
|---|---|---|
| Cash A/c | 50,000 | |
| Furniture A/c | 10,000 | |
| Capital A/c | 60,000 | |
| Rent A/c | 2,000 | |
| Sales A/c | 3,000 | |
| Purchases A/c | 5,000 | |
| Totals | 67,000 | 63,000 |
If totals do not match, an error exists. In this case, Debit = 67,000 and Credit = 63,000 → mismatch detected.
Correcting entries should be made until Debit = Credit.
5. Worked Example
Suppose the Ledger balances are as follows:
- Cash A/c → Debit 50,000
- Furniture A/c → Debit 10,000
- Capital A/c → Credit 60,000
- Rent A/c → Debit 2,000
- Sales A/c → Credit 3,000
- Purchases A/c → Debit 5,000
Now we prepare the Trial Balance.
| Account Title | Debit (Rs.) | Credit (Rs.) |
|---|---|---|
| Cash A/c | 50,000 | |
| Furniture A/c | 10,000 | |
| Capital A/c | 60,000 | |
| Rent A/c | 2,000 | |
| Sales A/c | 3,000 | |
| Purchases A/c | 5,000 | |
| Totals | 67,000 | 63,000 |
❌ Totals are not equal.
✔ After correction, totals will balance.
6. Interactive Tool
Both correct and incorrect Trial Balances by dragging balances into the right columns.
Students can drag and drop Ledger balances into Debit or Credit columns. The tool should automatically calculate totals and show whether Debit = Credit.
Trial Balance Drag & Drop Practice
Debit (Rs.)
Credit (Rs.)
How to Use This Tool
- Read the Example Title at the top (Correct or Incorrect Trial Balance).
- Drag each Account Balance from the options area into either the Debit or Credit column.
- Check the Totals shown at the bottom of each column.
- Click to see if your Debit = Credit.
- Use or to try more examples.
Tip: If Debit and Credit totals don’t match, drag again and correct until the scale balances.
7. Conclusion / Learning Outcome
The Trial Balance is a checkpoint in the accounting cycle.
It ensures that books are arithmetically correct before preparing the Final Accounts (Trading, Profit & Loss, Balance Sheet).
✅ After practicing, you should be able to:
Detect mistakes when totals don’t agree.
List Ledger balances in Debit or Credit columns.
Check if Debit and Credit totals match.