Trial Balance and Rectification of Errors

To help in the preparation of the financial statements. (Profit & Loss account and Balance Sheet). Account Title L.F. Debit Credit Balance Balance Capital Land and Buildings Plant and Machinery Equipment Furniture and Fixtures Cash in Hand Cash at Bank Debtors Bills Receivable Stock of Raw Materials Stock of Finished Goods Purchases Carriage Inwards Carriage Outwards Sales Sales Return Purchases Return Interest Paid Commission/Discount Received Salaries Long Term Loan Bills Payable Creditors Advances from Customers Drawings Total xxx xxx Fig. . : Illustrative trial balance . . To Ascertain the Arithmetical Accuracy of Ledger Accounts As stated earlier, the purpose of preparing a trial balance is to asceitain whether all debits and credit are properly recorded in the ledger or not and that all accounts have been correctly balanced. As a summary of the ledger, it is a list of the accounts and their balances. When the totals of all the debit balances and credit balances in the trial balance are equal, it is assumed that the posting and balancing of accounts is arithmetically correct. However, the tallying of the trial balance is not a conclusive proof of the accuracy of the accounts. It only