1. C HAPTER 4 Account Balances & Trial Balance

2. C ALCULATING THE B ALANCE OF A T-A CCOUNT Step 1 – Draw a line across the account at the end of the numbers and add the 2 sides of the account separately. These are called pencil footings. Step 2 – Subtract the smaller total from the larger the total. Write the result beneath the larger of the 2 numbers and circle it. This is the account balance. Bank 10540300 800432

3. T RIAL B ALANCE Is a listing of the account balances found in a ledger. It is used to see if: total debits = total credits. It does not find all mistakes but it checks if the accounts balance.

4. C REATING A T RIAL B ALANCE Step 1 – Set up the Heading – Who? What? When? Step 2 – List all the accounts. Step 3 – Place the debit balances in the debit column and the credit balances in the credit column. Step 4 – Add up the 2 columns. Step 5 – Compare the totals and ensure that they agree. If they do not agree, investigate why.

5. W HAT IF THE T RIAL B ALANCE DOES NOT B ALANCE ??? Y IKES !!! Don’t worry! Go through the following steps in order: 1. Re-add the trial balance. 2. Check that you have copied the balances from the ledger correctly. 3. Recalculate the ledger (t-account) balances. 4. Check that there is a balanced accounting entry for each transaction. *You need to balance your trial balance!*

6. P RACTICE Q UESTIONS Read pg. 98 – 101 in your Textbook about the trial balance Pg. 101 Review Questions #1, 2, 4, 5, 6, 7 Pg. 101 Exercise #1 Pg. 102 Exercise #2 & 3