Features and Objectives of Preparing Trial Balance

A trial balance can be defined as a statement of balances extracted from the various accounts in the ledger with a view to test the arithmetical accuracy of the books of account. It is has two sides debit and credit and they both should be equal.

Features of trial balance :

  1. Trial balance can be prepared anytime during the accounting period.
  2. It is prepared to check the arithmetical accuracy of posting of entries from journal to ledger, in other words it is an instrument for carrying out the job of checking and testing.
  3. It is not a part of the double entry system of book keeping but only for checking the accuracy of posting. However it does not reveal all errors.

Objectives of preparing trial balance:

  1. It ensures that all transactions have been recorded with the same debit and credit amounts
  2. It makes the preparation of trading, profit and loss account and balance sheet easy by making available the balances of all account at single place.
  3. By identifying errors in the books of accounts it helps in rectifying those errors before the preparation of the final accounts.
0 comments… add one

Leave a Comment

Related pages

advantages and disadvantages of mixed economic systemabsolute advantage formuladefine inferior goodsupsell examplesadvantages and disadvantages of accounting ratiosretail vs wholesale definitionadvantages and disadvantages of evafeatures of derivative marketfull form of gstadvantages of audit programmeare debtors current assetsdirect and indirect quote in forexadjusting journal entries unearned revenuewhat are the advantages and disadvantages of specializationdisadvantages of factoringdisadvantages of fdiwhat are the disadvantages of globalizationmeaning of consignerinferior goods and normal goodsbank loan advantages and disadvantagesadvantages of managerial accountingquota and tariffwhat are crossed chequesautocratic dictatordistinguish between explicit and implicit costwhat is consignment in accountingdistinguish between joint venture and partnershipmeaning of pros and cons in hindivarious types of elasticity of demandcredit sales journal entrymonopolistic economy definitionfactors affecting elasticityadvantages and disadvantages of imperfect competitiondefine conglomerate mergerdefine operating leasecapital budgeting decisions exampleswhat is the difference between a monopoly and an oligopolydeferred revenue expenditure accounting treatmentearned value management disadvantagesdefine traditional economytypes of dividend policiesadvantages of merger and acquisition pdfdebit card wikipediadecentralization advantagesexamples of monopolistic competition marketsdirect quotation to indirect quotationmeaning of traditional economydisadvantages of international joint venturesdebit the giverpayback analysis definitionwhat are leverage ratiosofs in stock marketwholesale banking vs retail bankingfeatures of monopolisticpreference shares advantages and disadvantagesexamples inferior goodswhat is endorseesystematic and non-systematic riskwhat is the lifo methodrtgs long formmonopoly and oligopolycalloption putoption.comsimilarities between socialism and capitalismperfect or pure competitionhypothecationbarter system advantages and disadvantagesadvantages and disadvantages of being an accountantdifference between accounts payable and receivableperfect competition in economics definitionadvantages and disadvantages of cashless societyprestige pricing definitionvertical horizontal and conglomerate mergers