Formation of Trial Balance from Ledger - JSS3 Business studies Lesson Note
To form a trial balance, follow these steps:
- List all Ledger Accounts: Identify and list down all ledger accounts with their balances.
- Classify Balances: Group the balances into debit and credit columns.
- Total Debits and Credits: Calculate the total debits and total credits.
- Verify Equality: Ensure that the total debits equal the total credits.
Example: Suppose we have the following ledger accounts with balances:
|
Account |
Debit (₦) |
Credit (₦) |
|
Cash |
5,000 |
|
|
Accounts Receivable |
3,000 |
|
|
Inventory |
8,000 |
|
|
Accounts Payable |
4,000 |
|
|
Owner's Capital |
10,000 |
The trial balance would be:
|
Account |
Debit (₦) |
Credit (₦) |
|
Cash |
5,000 |
|
|
Accounts Receivable |
3,000 |
|
|
Inventory |
8,000 |
|
|
Accounts Payable |
4,000 |
|
|
Owner's Capital |
10,000 |
|
|
Total |
16,000 |
14,000 |