CHAPTER IV 

 THE TRIAL BALANCE 



Explanation of Trial Balance Terms. A trial balance 

 is a list of debit and credit balances of all ledger accounts. 

 The name is also applied to a list of debit and credit totals 

 of ledger accounts , although the latter also bears the name 

 proof sheet. 



The process of listing the balances or totals from the 

 ledger accounts into the trial balance book or trial balance 

 sheet is known as "taking off a trial balance/' 



The trial balance is said to be "in balance" if the > 

 of the debit and credit columns are equal. If the trial 

 balance is in balance, the ledger is said to be in balance, 

 and broadly speaking, the books are said to be in balance. 



The trial balance is said to be "off" if the sums of the 

 debit and credit columns are not equal. Likewise, if the 

 trial balance is off the ledger is said to be "off" or "out 

 of balance. " 



Purpose of the Trial Balance. The trial balance is pre- 

 pared for the purpose of testing the accuracy of the en- 

 tries in the ledger and for supplying amounts to be used 

 in preparing financial statements. It has been stated as 

 a principle of bookkeeping, that each transaction requires 

 a debit and a credit entry of equal amounts in the ledger. 

 It follows that if all transactions are thus correctly re- 

 corded, the sum of all debits in the ledger should equal 

 the sum of all credits. From this is derived the principle 

 that the sum of all debit balances should equal the sum of 



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