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How to Prepare Trial Balance from Ledger

In financial accounting, for preparing trial balance, we have to follow the process. First we have to pass the journal entries, then we prepare ledger accounts and then third no. will of preparing trial balance. 

After making ledger accounts, find find the ledger accounts balance and we posted into a statement all these balances of each account. This statement will be trial balance. Remember it is not journal entry or ledger account. It is the list of balance of ledger accounts. 

Main purpose of making trial balance is to check the accuracy of ledger accounts. It has debit ledger balance and credit ledger balance. It must be equal. Means there are two columns of trial balance and debit column of trial balance total must be equal to credit balance total of trial balance. 

If trial balance does not match its debit and credit ledger accounts balance, it means

there may be some mistakes of account which may be during preparing journal entries 

or preparing ledger accounts

or some accounting information hided during journal entries or ledger accounts. So, it is useful for senior management also.

Simple rule of preparing Trial balance

1. In the debit column of trial balance, we will write all the assets account balance and expenses and losses's account balance 

2. In the credit column of trial balance, we will write all the liability ledger account's balance and income and gain account balance.

3. If trial balance does not match, we will calculate's difference and transfer to suspense account. When the mistake finds we will transfer suspense account in that and written off and same account will add in the trial balance and debit balance will tally with credit balance of trial balance. 

Now for preparing trial balance from ledger,
We will take the example of ledger account balance

Mohan's capital account = Rs. 3,00,000

SBI Bank account = Rs. 2,00,000

Purchase account  = 50,000

Sale account  = 60,000

Building Account = RS. 2,00,000

Purchase return =30,000

Sale return = 20,000

internet charge account = 2000

dividend received account = 5000

debtor account = 15000

Creditor = 15000

Cash in hand = 6000

furniture = 45000

Salary to employees account = 10000

drawing account = 10000

Loan Account = 148000


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1. Learn Why items of ledger accounts goes to Credit balance

capital account

Because this liability account, so, it will have credit balance and will go to credit balance column of trial balance. 

creditor account

Because this liability account, so, it will have credit balance and will go to credit balance column of trial balance. 

loan account 

Because this liability account, so, it will have credit balance and will go to credit balance column of trial balance. 

sales account 

Because this income account, so, it will have credit balance and will go to credit balance column of trial balance. 

dividend account

Because this income account, so, it will have credit balance and will go to credit balance column of trial balance. 

purchase return

reverse of expense account will be credit balance in trial balance. 

2. Learn Why items of ledger accounts goes to Debit balance

SBI Bank

Because this asset account, so, it will have debit balance and will go to debit balance column of trial balance. 

sale return account

Because this is reverse of income account, so, it will have debit balance and will go to debit balance column of trial balance. 

building account 

Because this asset account, so, it will have debit balance and will go to debit balance column of trial balance. 

debtor account 

Because this asset account, so, it will have debit balance and will go to debit balance column of trial balance. 

cash account 

Because this asset account, so, it will have debit balance and will go to debit balance column of trial balance. 

furniture account 

Because this asset account, so, it will have debit balance and will go to debit balance column of trial balance. 

internet charge account 

Because this expense account, so, it will have debit balance and will go to debit balance column of trial balance. 

salary account 

Because this expense account, so, it will have debit balance and will go to debit balance column of trial balance. 

drawing account 

Because this expense account, so, it will have debit balance and will go to debit balance column of trial balance. 

purchase account 

Because this expense account, so, it will have debit balance and will go to debit balance column of trial balance. 

Read Related Contents of Your Same Topic

  1. Trial Balance Example
  2. Reasons of Preparing Trial Balance
  3. Adjusted Trial Balance
  4. Trial Balance Vs Balance Sheet
  5. Trial Balance
  6. Objectives of Trial Balance
  7. Errors Which a Trial Balance Fails to Disclose
  8. Preparation of Trial Balance from a List of Balances


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Accounting Education: How to Prepare Trial Balance from Ledger
How to Prepare Trial Balance from Ledger
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