Explain the format of trial balance and how it is prepared

The format of trial balance is as follows −

Here,

• Title − Name of the company.
• DD/MM/YYYY − Trial balance prepared Date, Month and Year.
• Account number − Ledger account (serial numbers).
• Account title − Full account name of ledger account.
• Ledger folio − Page number of ledger balance of accounts.
• Debit − Debit balance.
• Credit − Credit balance.

Balances records in the debit column includes the following −

• Assets − Trademarks, goodwill, stock, accounts receivables, land, leasehold property, building, investments, furniture etc.
• Expenses − Rent, bad debt expenses, advertisement, salary, discount, depreciation, commission, repairs, interest etc.
• Prepaid expenses − Insurance (prepaid), salary in advance, rent (prepaid) etc.
• Accrued income − Interests on accrued on balance investments, accounts receivable and notes receivables.
• Unearned income − Rent (unearned), premium (unearned) etc.
• Others − Sales (returns), discount on accounts payable etc.

Balances recorded in credit column include the following−

• Liabilities (external) − Loan, debentures, overdraft, accounts payable etc.
• Incomes − Discount and interest income, rent (revenue) etc.
• Expense payable − Salaries, rent
• Losses − Lost goods, lost cash etc.
• Reserves and provisions − Doubtful debts (provisions), general reserves etc.
• Others − Capital, recovered bad debt, purchases return.

Nagasravan Tamma

Updated on: 09-Jul-2021

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