Page 120 - Book-keeping for Secondary Schools Student’s Book Form One

Book-Keeping for Secondary Schools

Chapter Six

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Trial balance

Introduction

The trial balance serves a critical role in accounting, offering accuracy checks,
error detection, and support for financial statements preparation. By promoting
the accuracy of financial data, the trial balance contributes to reliable financial
reporting and informed decision-making within a business or enterprise. In this
chapter, you will learn concept of a trial balance and how to prepare it. The
competencies developed will enable you to prepare the trial balance from a given
list of general ledger balances, as well by processing transactions from the source
documents up to extracting a trial balance.

at a specific date. The trial balance is
Think
prepared using debit and credit balances
On the ways in which a shop keeper can extracted from general ledger accounts.
establish a total outstanding amount of In chapter five you learnt that the entries
money from credit customers.
are posted to the general ledger accounts
following the double entry principle of
Concept of a trial balance Book-keeping. This means that, at any
The trial balance extraction is a fundamental time the trial balance should balance. In

phase in accounting and serves as an other words, if the posting of the entry
important step in the accounting cycle. in the ledger accounts is done correctly,
the total of debit balances and the total of
Meaning of a trial balance credit balances must be equal.
A trial balance can be defined as a list of
balances extracted from general ledger Advantages of a trial balance
accounts at a particular date. In simple A trial balance has the following
words, a trial balance is a snapshot or advantages to an enterprise:

a picture of ledger accounts balances

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Student’s Book Form One

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