📊 Trial Balance

The trial balance is a statement that lists all the accounts and their respective balances both debit and credit at a specific date. Its primary purpose is to ensure that debits equal credits, thereby verifying the accuracy of recording transactions in the general ledger. The trial balance acts as an internal control mechanism, allowing accountants to identify any errors or discrepancies before preparing financial statements. 🔍

📝 Preparation of the Trial Balance

The preparation of a trial balance is an essential step in the accounting process. It involves listing all the balances of the ledger accounts to ensure that the debits and credits are equal. ⚖️

💳 Debit Balances

The debit side of the trial balance includes assets, expenses, and dividends. These accounts are recorded as debits to reflect increases or decreases in their balances. 📈

💰 Credit Balances

The credit side of the trial balance includes liabilities, equity, and revenue accounts. Credits are recorded to reflect decreases in assets and increases in liabilities and equity. 📉

📋 Format of the Trial Balance