Chapter 7 - Trial Balance

 Once all source documents has been recorded in the journals and the journals has been posted to the ledgers, the business can start to prepare the trial balance. 

The trial balance is a balance of all accounts ledger with amount balances at a given date.  

The purpose of a Trial balance is :- 

💥 To check for any arithmetic errors &

💥 Assist in the preparation of financial statements

Lets do a question and do up the trial balance: -

1. Owner Fittbitt contributed $10,000 cash to the business

2. The company purchased stock at $50,000 list price and obtained a trade discount of 10% for hope of continued patronage and larger quantities purchase from supplier TB.

3. Sales of $2,000 were made to Customer C on credit.

4. Rental and electricity of $5,000 each is accrued on a monthly basis. 

1st Step: Prepare the individual ledger accounts : -

Based on the ending balance of the ledger above, we prepare the Trial balance: -

The Debits and Credits has to be equal otherwise, a check have to be made to investigate the reason.

There you go, a trial balance:)

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