for preparing trial balance Trial balance helps to check the arithmetical accuracy of entries made in the accounting records. Trial balance serves as a lubricant for the smooth movement and completion of the accounting cycle, because, it is with the help of the trial balance that discrepancies in the book keeping work are detected. If these discrepancies are not detected and set right, the cycle cannot be completed properly. The trial balance helps in discovering errors which may have been committed in the accounting records.
However, in computerised accounting system, once the transactions are recorded in the journals, all the other records are made simultaneously, i.e., ledger postings, trial balance and final accounts. Hence, arithmetic errors and errors in posting the entries from journal to ledger and further will not occur in computerised accounting. Trial balance Ledger Journal Accountancy - . Definition of trial balance “A trial balance is a statement, prepared with the debit and credit balances of the ledger accounts to test the arithmetical accuracy of the books”.
– J.R. Batliboi . Features of trial balance Following are the features of trial balance: (a) Trial balance contains the balances of all ledger accounts. (b) It is prepared on a specific date.
That is why, the word, “as on…” is used at the top. (c) When double entry system is followed, the totals of the debit and the credit columns of the trial balance must be equal. Thus, trial balance helps to check the arithmetical accuracy of entries made in the books of accounts. (d) If there is a difference between the totals of debit column and credit column of the trial balance, it is an indication of errors being committed somewhere.
(e) If both the debit column and the credit column of the trial balance have the same total, it does not mean that there is no mistake in accounting, since some errors are not disclosed by the trial balance. . Objectives of preparing trial balance Trial balance is prepared with the following objectives: (i) Test of arithmetical accuracy Trial balance is