A trial balance lists every ledger balance in two columns and checks that the debit total equals the credit total. This guide covers how to prepare one, how to find errors that stop it agreeing, and what agreement can never prove.
How do the four lessons connect?
Start with preparing a trial balance, because every later lesson uses the same layout. Then learn the quick tests in finding errors that disturb agreement.
The third lesson turns the question around: errors that do not disturb agreement can sit inside a perfectly balanced trial balance. The last lesson explains using a suspense account when a difference cannot be found straight away.
Why can an agreeing trial balance still be wrong?
Here is an original example. A business buys a computer for RM2 500 and pays by cheque, but the bookkeeper debits Purchases instead of Computer equipment.
Both columns still add up to the same total, so the trial balance agrees. Yet purchases are overstated by RM2 500 and the asset is missing from the ledger. Agreement shows that the entries are balanced, not that they are in the right accounts.
Where should you start?
- Trial balance is new to you: read the lesson on preparing one, and practise placing each balance on its normal side.
- Your trial balance rarely agrees: go straight to the lesson on errors that disturb agreement and use its order of checks.
- Close to an exam: use the trial balance practice set and the trial balance and adjustment explorer.
When is tuition worth considering?
The free lessons show the checks. A one-to-one teacher watches you apply them to a trial balance you have not seen, and can tell from your working which step you skip under time pressure.
Read online one-to-one Accounting tuition for an example lesson, or return to the SPM Accounting guide.