Syntax error Explain the format of trial balance and how it is prepared

Explain the format of trial balance and how it is prepared

The format of trial balance is as follows −

Title      
DD/MM/YYYY
Account number Account title Ledger folio Balance
debit Credit
         
         

Here,

  • Title − Name of the company.
  • DD/MM/YYYY − Trial balance prepared Date, Month and Year.
  • Account number − Ledger account (serial numbers).
  • Account title − Full account name of ledger account.
  • Ledger folio − Page number of ledger balance of accounts.
  • Debit − Debit balance.
  • Credit − Credit balance.

Balances records in the debit column includes the following −

  • Assets − Trademarks, goodwill, stock, accounts receivables, land, leasehold property, building, investments, furniture etc.
  • Expenses − Rent, bad debt expenses, advertisement, salary, discount, depreciation, commission, repairs, interest etc.
  • Prepaid expenses − Insurance (prepaid), salary in advance, rent (prepaid) etc.
  • Accrued income − Interests on accrued on balance investments, accounts receivable and notes receivables.
  • Unearned income − Rent (unearned), premium (unearned) etc.
  • Others − Sales (returns), discount on accounts payable etc.

Balances recorded in credit column include the following−

  • Liabilities (external) − Loan, debentures, overdraft, accounts payable etc.
  • Incomes − Discount and interest income, rent (revenue) etc.
  • Expense payable − Salaries, rent
  • Losses − Lost goods, lost cash etc.
  • Reserves and provisions − Doubtful debts (provisions), general reserves etc.
  • Others − Capital, recovered bad debt, purchases return.
Updated on: 2021-07-09T13:45:15+05:30

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