Prepare Trial Balance from Ledger Balances
Preparing a trial balance from ledger balances is the next step of posting and balancing ledger accounts. The trial balance is a statement of debit and credit balances that are extracted from ledger accounts on a specific date.
The trial balance is prepared with two different techniques: Total Method and Balance Method.
According to the Total Method, the sum of debits and credits of every account is shown in the trial balance, i.e. both debit and credit totals are recorded in the trial balance. On the other hand, according to the Balance Method, only the Net balance which is the difference between credit and debit total is transferred and recorded.
Related Topic – What is Adjusted Trial Balance?
Prepare a trial balance as on 31st Dec 2013 by filling in the debit and credit columns accordingly for each ledger balance mentioned below.
| Account | Balance | Account | Balance |
| Capital | 70,000 | Carriage Inwards | 1500 |
| Opening Stock | 20,000 | Carriage Outwards | 2000 |
| Salaries | 10,000 | Plant & Machinery | 17,000 |
| Returns Inward | 500 | Investments | 7000 |
| Returns Outward | 6000 | Sales | 70,000 |
| Purchases | 80,000 | Patents | 10,000 |
| Sales Ledger Control | 7000 | Furniture | 8000 |
| Purchase Ledger Control | 40,000 | Discount Allowed | 1000 |
| Cash in Hand | 15,000 | Misc. Receipts | 4000 |
| Cash at Bank | 11,000 | Closing Stock | 9000 |
Ans.
Trial Balance From the Above Ledger (31st Dec 2013)
| Particulars | Debit | Credit |
| Capital | 70,000 | |
| Opening Stock | 20,000 | |
| Salaries | 10,000 | |
| Returns Inward | 500 | |
| Returns Outward | 6000 | |
| Purchases | 80,000 | |
| Sales Ledger Control | 7000 | |
| Purchase Ledger Control | 40,00 | |
| Cash in Hand | 15,000 | |
| Cash at Bank | 11,000 | |
| Carriage Inwards | 1500 | |
| Carriage Outwards | 2000 | |
| Plant & Machinery | 17,000 | |
| Investments | 7000 | |
| Sales | 70,000 | |
| Patents | 10,000 | |
| Furniture | 8000 | |
| Discount Allowed | 1000 | |
| Misc. Receipts | 4000 | |
| Total | 1,90,000 | 1,90,000 |
The way a balance is transferred to either debit or credit side of a trial balance depends on the nature of that account, below is the table showing the relationship between types of accounts and their usual balances.
| Type of Account | Usual balance |
| Assets | Debit |
| Liability | Credit |
| Capital | Credit |
| Revenue | Credit |
| Expenses | Debit |
| Drawings | Debit |
| Contra Asset | Credit |
| Contra Liability | Debit |
Short Quiz for Self-Evaluation
>Read What is a Contra Account?