Explain the format of trial balance and how it is prepared

Banking & FinanceFinance ManagementGrowth & Empowerment

The format of trial balance is as follows −

Title      
DD/MM/YYYY
Account numberAccount titleLedger folioBalance
debitCredit
     
     

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.
raja
Published on 09-Jul-2021 13:45:15
Advertisements