Imagine you’re checking your phone’s battery: Green = Good, Red = Problem. A Trial Balance is like that for accountants! It’s a worksheet listing all ledger accounts to check:
Total Debits (Dr) = Total Credits (Cr). If they match ✅ → Your books are mathematically correct. If not ❌ → Find errors!
Remember:
It’s NOT a financial statement (like Profit & Loss).
It’s a tool to catch math mistakes before preparing final accounts.
Why Do We Need It?
Thanks to Double-Entry System:
Every transaction affects TWO accounts.
Debit (Dr) must always equal Credit (Cr).
Example: You buy goods for ₹5,000 cash:
Purchases A/c (Dr) ↑ by ₹5,000
Cash A/c (Cr) ↓ by ₹5,000
Trial Balance checks this balance!
Trial Balance Format (Super Easy!)
Just 4 columns – like a school timetable:
Account Name
LF (Ledger Folio)
Debit (Dr)
Credit (Cr)
Cash A/c
101
20,000
Sales A/c
201
30,000
Rent A/c
301
5,000
TOTAL
25,000
30,000
❌ Uh-oh! 25,000 ≠ 30,000 → Mistake found!
Standard Trial Balance Format
Real-Life Example (Rahul’s Stationery Shop)
Rahul’s December 2024 Ledger Balances:
Cash: ₹10,000 (Dr) → Money in hand
Sales: ₹25,000 (Cr) → Income earned
Rent Paid: ₹8,000 (Dr) → Expense
Loan from Bank: ₹15,000 (Cr) → Borrowed money
Step 1: Classify as Dr or Cr
Assets/Expenses: Always Debit (Cash, Rent)
Income/Liabilities: Always Credit (Sales, Loan)
Step 2: Prepare Trial Balance
Account Name
Dr (₹)
Cr (₹)
Cash A/c
10,000
Sales A/c
25,000
Rent A/c
8,000
Loan A/c
15,000
TOTAL
18,000
40,000
Oh no! 18,000 ≠ 40,000 → Rahul forgot ₹22,000! Mistake: Sales entry was overstated by ₹15,000?
Practice example with unbalanced totals
3 Golden Rules for FYBCom Students
Debit = Left Side, Credit = Right Side (Always!)
Assets + Expenses = Debit
Cash, Building, Rent, Salary
Liabilities + Income = Credit
Loan, Sales, Commission Received
Quick reference for account classification
Why Trial Balance Doesn’t Find All Errors
It catches math mistakes, but not:
Omitted entries (Forgot to record a sale)
Wrong account (Recorded rent in Salary A/c)
Duplicate entries (Recorded the same transaction twice)
Let’s Practice Together!
Problem: Priya’s balances (Jan 2025):
Cash: ₹12,000 (Dr)
Purchases: ₹7,000 (Dr)
Sales: ₹18,000 (Cr)
Electricity Bill: ₹3,000 (Dr)
Bank Loan: ₹10,000 (Cr)
Solution:
Account
Dr (₹)
Cr (₹)
Cash A/c
12,000
Purchases A/c
7,000
Sales A/c
18,000
Electricity A/c
3,000
Bank Loan A/c
10,000
TOTAL
22,000
28,000
Mismatch! 22,000 ≠ 28,000 → Priya understated Purchases by ₹6,000?
Conclusion
Trial Balance = Your accounting safety net.
Match Dr & Cr? → Move to Profit & Loss, Balance Sheet.
Don’t match? → Grab a coffee and hunt errors!
Remember:
“Debit on the LEFT, Credit on the RIGHT – Get them equal, and you’re shining bright!” ✨
Where Trial Balance fits in your accounting journey.
