trail balance is a statement, which is prepared based on ledger accounts closing balances.
trail is very important to know the arthemetical accuracy of business transactions.
As per double entry systems all the Debit entries has its
equalent credit entries.to know the correctness of the
books as per the above concept Trial Balance is
prepared.With the help of Triall Balance, P&L and Balance
Sheet is prepared.
Preparation of trial balance is the third phase in the
accounting process, after posting the accounts in the
ledger a statement is prepare to show separately the debit
or credit balance. Such a statement is known as Trial
Balance.
to check the arithmetic accuracy of all the ledgers. only
if the debit balances total is equal to the credit balances
total we can prepare final accounts
As name indicates,it is a trial on arithmetical accuracy of
ledger balances before preparing final accounts.Debit must
be equal to credit. on debit side of the trial balance all
assets & expenses and on credit side of T/B all liabilities
& incomes will consider.
Q.Goods worth Rs.5000 destroyed in fire? Insurance claim
received RS.4000 for the goods lost? Loss of Rs.1000 pass
the entries in the books of accounts?
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