what-is-trial-balance-report

What is Trial Balance Report | Trial Balance Report Example

What is Trial Balance Report | Trial Balance Report Example

What is Trial Balance Report | Trial Balance Report Example

Trial balance is an accounting reporting in which the balance of all accounting categories is calculated into debit and credit column totals. A correct trial balance should equal the credit and debt, if it doesn’t there are errors in the accounting transactions. Businesses usually prepare trial balance reports at end of every reporting period like monthly.

 

The purpose of using trial balance is to make sure that the company’s bookkeeping entry processes are mathematically correct.

 

How to prepare a trial balance report?

A trial balance is a point in time report, meaning it is only valid for the specific time on which the report is prepared. It can be prepared for a specific time, but not over a period of time. For example. You can prepare a trial balance as of Dec 31st but you cannot prepare it for the last year.

 

Once the report time point is identified, it is important to gather all the balances of every account or category in your accounting system. Usually assets, expense categories will have debit balance and liability, equity and income categories will have a credit balance. Usually, the trial balance will have 3 columns. Account or categories name followed by debit and credit column.

Should trial balance net to Zero?

The trial balance should always zero out, the sum of debits of all accounts must equal the sum of credit of all accounts. If the report doesn’t zero out, then there is mathematical or transactions errors for any of the accounting categories. Accountants usually run trial balance report to check for consistency of the accounting books.

 

A trial balance is a list of all that contain credit and debit balances, in the ledger accounts. If every double entry is carried correctly, the credit balances total should always be equal to the debit balances total in the trial balance. If there occurs an imbalance, then there is an error, or issue on the nominal ledger accounts.

 

Modern accounting software like QuickBooks, myBooks has the ability to generate trial balances with a click of a button at any point in time. Additionally, the use of accounting software usually enables systematically correct transactions free of mathematical errors and hence mostly it will zero out making sure the accounting system is free of mathematical errors.

 

What are the types of trial balances?

There are 3 types of trial balance to help and support our business.

Types of trial balance:

  • Adjusted trial balance
  • Unadjusted trial balance
  • Post-closing Trial Balance

Trial balance items List:

The trial balance item lists for both credit and debit is as follows,

  • The Trial Balance List Items from Credit Side

The credit side trial balance will feature entries from accounts such as, drawings accounts, assets, expense accounts, bank balance, cash balance, purchases, Loses, and sundry debtors, among others.

  • The Trial Balance List Items from Debit Side

Debit side trail balance will feature entries from income accounts, capital accounts, liabilities, sundry creditors, sales, gains, and reserves.

 

Sample Trial Balance Report | Trial Balance Report Example

Trial Balance Report
    
ACCOUNTACCT CODEDEBITCREDIT
ASSETS   
    
Petty Cash1020 $  4,421.77 $            –
Accounts Receivable1200 $  6,767.65 $            –
Furniture & Equipments1730 $     500.00 $            –
    
LIABILITY   
    
Accounts Payable2000 $     822.00 $            –
Sales Tax Payable2240 $            – $     648.75
    
EQUITY   
    
Owners Equity3150 $            – $  4,000.00
    
INCOME   
    
Artists Income Coloring4010 $            – $  3,675.15
Artists Income Editing4020 $            – $  3,350.00
Artists Inc. Fine art comm.4030 $            – $  6,250.00
    
EXPENSE   
    
Advertising6000 $       38.00 $            –
Auto and Truck Expenses6010 $       28.50 $            –
Bank Fees6020 $         9.50 $            –
Business Licenses6025 $       71.25 $            –
Computer and Internet6030 $       57.00 $            –
Contract Labor6035 $       57.00 $            –
Dues & Subscriptions6045 $       37.98 $            –
Insurance6050 $     285.00 $            –
Meals and Entertainment6060 $       76.00 $            –
Office Supplies6065 $       11.40 $            –
Payroll Expenses6100 $       19.00 $            –
Officers Compensation6133 $       14.25 $            –
Postage & Shipping6200 $       28.50 $            –
Printing6210 $         9.50 $            –
Professional Fees6220 $       95.00 $            –
Rent6240 $  1,026.00 $            –
Repairs & Maintenance6250 $       28.50 $            –
Security6260 $       45.60 $            –
Telephone6280 $       48.45 $            –
Travel6290 $       14.25 $            –
Utilities6300 $     684.00 $            –
Income Tax Expense6310 $       24.70 $            –
Purchase Taxes6785 $     265.10 $            –
Utilities6990 $     228.00 $            –
    
TOTAL  $17,923.90 $17,923.90

What is Trial Balance Report | Trial Balance Report Example

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