Teach me how..?

Question

Can anyone teach me how to prepare a trial balance?How about adjusted trial balance?

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. Often credits will be represented as a negative leading the total of the trial balance to be 0. 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: 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 the perspective taken, e.g., in typical bank account statements. Mistakes due to such misunderstandings are not apparent in the trial balance.

Answer 2

A trial balance is the first step in completing a Worksheet, which is then used to put together financial statements like the Balance Sheet. Now the Trial Balance pulls its figures from the general ledger. So it's a check of accuracy in items that have been posted from the journal to the ledger. And the order in which the accounts would appear on the Trial is the same as they appear in the ledger. So the Trial Balance picks up its info from the General Ledger.

And all we're doing here is checking to see if our total debits = total credits. So the Trial is a quick checking to see if we're in balance. And making sure our ledger accounts are all in order. So the ledger is a check of our journal. And the trial is a check of our ledger.