why do we have make a trial balance in the worksheet?

Answer 1

In bookkeeping, the trial balance is a worksheet wherein all the balances of each ledger are entered in two columns, namely debit and credit. Trial balance is prepared in each financial period as a summary of the closing of the previous ledger. The total of the debit side should always be equal to the total of the credit side which proves the arithmetic accuracy of the ledger entry. So the trial balance is also a tool to detect any errors which may have occurred during the double-entry system of the ledger. However, a balanced trial balance does not necessarily guarantee that there is no error. For example, a transaction could have been removed from the ledger account, a journal entry might have been posted in the wrong ledger, or debit and credit entries could have been transposed. Such mistakes might not be shown in the trial balance. One feature of the double entry system that often confuses users, is that the terms 'credit' and 'debit' are used in the opposite way to what they would in another system, a bank account for instance.

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Answer 2

To ensure whats entered is correct and to have totals to be transferred to the journals, Income statement and Balance sheet.

Finally to have convenient totals for financial analysis, reconciliation with the bank statements and the all important Cash flow statement.

Answer 3

To see if everything works out as expected

Answer 4

add up all the credits....subtract the debits....this should equal the net worth.

Answer 5

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