Page 100 - Account 10

1. Introduction
The duality concept is one of the fundamentals of accounting theory. According to
double entry system, the total of debit and the total of credit should be equal. So, at the
end of month, quarter, half year and year, a statement is prepared with the help of ledger
balances to find out/see whether or not the two totals are equal, such a statement is called
trial balance.
A trial balance is a list of the ledger accounts prepared at a specified date showing their
debit or credit balances and thus, to see the sum totals of debit side and credit side
respectively. It should be noted that this list of ledger balances can only be prepared
when they are completed. It is the way of checking arithmetical accuracy of the books of
accounts.
In the words of M.S. Gosav, “Trial balance is a statement containing the balances of all the
ledger accounts as at any given date arranged in the form of debit and credit columns, placed side
by side and prepared with the object of checking the arithmetical accuracy of the ledger posting.”

In the words of Dr. A. N. Agrawal, “A trial balance is a statement of the debit and credit
balances of the various ledger accounts, which is prepared to check their arithmetic accuracy.”
In the words of J.R. Batliboi, “A trial balance is a statement prepared with the debit and credit
balances of ledger accounts to test arithmetical accuracy of books.”
From the above meaning and definitions, it is learnt that a trial balance possesses the
following essentials:
i. It is the list of all the ledger balances of a business house during a certain period.
ii. It is prepared on a specified date.
iii. It is prepared to check the arithmetical accuracy of the books of account.
iv. Debit and credit totals must be equal. If it is not equal, there may be mistakes.
In conclusion, a trial balance may be defined as a statement of the ledger accounts of a
businessman on a certain specified period by mentioning their debit and credit balances
separately in order to check the arithmetic accuracy of the books of account and their
ledger posting. It may also be prepared by mentioning the debit and credit totals of every
ledger accounts. When the totals of the two sides of this statement are equal, the books
of accounts are supposed to be accurate arithmetically. It is not the conclusive tool for
measuring the entire accuracy of the books of account in the sense that some sort of errors/
mistakes like errors of principle and compensating errors, etc. cannot be checked by it.

Key Point Trial balance may be defined as a statement of the ledger accounts of a
business in terms of their balances on a certain specified period to check
the arithmetic accuracy of the books of account.

2. Objectives of Trial Balance

A trial balance is an important tool in checking the arithmetical accuracy of the
subsidiary and principal books of account of a businessman. It is also important in
facilitating the preparation of final accounts. It is a statement or list of the ledger accounts

100 Aakar’s Office Practice and Accountancy - 10 Trial Balance 101