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WHY DO WE DO A TRIAL BALANCE? Periodically it is necessary to check the accuracy of the ledger (your T-accounts) TRIAL BALANCETo do this we use a form.

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Presentation on theme: "WHY DO WE DO A TRIAL BALANCE? Periodically it is necessary to check the accuracy of the ledger (your T-accounts) TRIAL BALANCETo do this we use a form."— Presentation transcript:

1 WHY DO WE DO A TRIAL BALANCE? Periodically it is necessary to check the accuracy of the ledger (your T-accounts) TRIAL BALANCETo do this we use a form called a TRIAL BALANCE Trial Balance

2 WHAT IS A TRIAL BALANCE? TRIAL BALANCETRIAL BALANCE - is simply the listing of the account balances in a ledger – it is used to see if the dollar value of the accounts with debit balances is equal to the dollar value of the accounts with credit balances 4.4 Trial Balance

3 KEY TERMS IN BALANCEIN BALANCE – if the debits equal the credits OUT OF BALANCEOUT OF BALANCE – if the debits don’t equal the credits 4.4 Trial Balance

4 STEPS TO CREATE A TRIAL BALANCE 1)Include the heading (who, what, when) 2)List all the accounts and their balances. 3)Place the debit balances in a debit column and the credit balances in a credit column. 4)Add up the 2 columns. 5)See if the 2 column totals are the same.

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9 Trial Balance Example

10 ACCOUNTS DebitsCredits

11 If the 2 columns balance does that mean I did it right? NO 4.4 Trial Balance Sometimes the errors made were incorrect entries that just happened to be balanced.. This takes some skill to detect and solve


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