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Explain the format of trial balance and how it is prepared
The format of trial balance is as follows −
|Account number||Account title||Ledger folio||Balance|
- 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.
- How is the balance sheet prepared from trial balance?
- Explain how trial balance is prepared by using the balances method
- How trial balance is prepared by using the totals method?
- How trial balance is prepared by using balances and totals method?
- Explain the concept of trial balance
- Explain trial balance with an example
- Distinguish between trial balance and balance sheet
- What is adjusted trial balance?
- What is unadjusted trial balance?
- What is trial balance in accounting?
- Prepare horizontal balance sheet for the following trial balance.
- Prepare trial balance using total and balance method for the given data
- How to prepare an unadjusted trial balance?
- How are errors classified in trial balance?
- How are entries recorded in adjusted trial balance?