What do you understand by the term Trial Balance

Question

What do you understand by the term Trial Balance? And also write down the major features and employs of a trial balance?

Answer 1

Trial balance is a list of all balances standing into the ledger accounts of a firm at any given time. The major features of trial balance are as follows.

i) This is a statement made in a tabular form.

ii) It has two columns: one for debit balances and other for credit balances.

iii) Closing balances are appeared through ledger accounts are shown in the statement.

iv) It is not an account however only a statement of balances.

v) It is made on the base of balanced accounts.

vi) It is a way of verifying the arithmetical accuracy of entries prepared in the ledger.

vii) It assists in making of trading account, Balance Sheet and Profit and Loss account at the end of the period that show the financial position of the firm.