Discussing the format of a trial balance here on my blog is for you to be able to know the difference formats in which trial balance are being shown in banks and loan organisations.
And by looking at the format of a trial balance in this article I'm going to explain what you need to know on the various parts that is been seen today in a trial balance format.
Meanwhile, take note that I give business update here on my blog waec pasco, so it is for your own good for you to learn how to use a trial balance format for your business as it will help you in balancing your debit and credit transactions.
1. In a trial balance you will find every transaction in form of a picture otherwise known as financial picture of an entity.
This financial picture of an entity may be a sole proprietor, a partnership or a limited liability company.
In our a sole proprietor. And one of the things to take note of and be very careful with is that in every record you keep using a trial balance, the sole proprietor must bear the name of the business.
Take a look at the typical ruling of a trial balance format being shown as follows.
If you had read my first blog post on functions of a trial balance, you should have seen or learnt it from where I said that the trial balance gives the total balance of all transactions been put in calculation this is otherwise known as the figure of a ledger account.
And the figure the ledger account must be calculated with the date of data entry. This is the reason why every trial balance mustbear a date.
The folio column in a trial balance serve as an indicator to the ledger reference of the account. And in a lay man understanding, the folio numbers can be said to be a way of making the figures being recorded in a trial balance easy for cross-check.
But also take note that In a computerised accounting environment, the folio number is represented by an account is known to be shown as 00number.
Then in a manual accounting it can be shown as "Oosystem, each ledger account must bear a number, this is because it is this number that will be quoted under the folio column.
4. The number four thing to take note of in a trial balance format is that all balancing figures entered on the credit column of an account are entered on the debit column of the trial balance. This is in order for you to maintain a correct total balance of your transactions.
When I was teaching this topic in a lesson center for high school leavers, I discovered that some of my students have this mistaken belief by thinking that if a figure is on the credit side of an account, the same figure should be shown on the credit side, of the trial balance.
So in order for you reading this not to make this same particular mistake which is deadly, always take note of this things which is, When balancing a figure that is entered on the credit side, it means that the debit side is greater than the credit side by the amount you entered on the credit side.
In terms of giving account of your transactions, you should also know that the side which is greater than is describing the nature of the balance of the account.
The insertion, on the credit side, of the difference between the two sides is intended to make the total of the two sides equal. For that reason, all accounts with debit balances have their respective balancing figures entered in the debÃt column of the trial balance.
5. The credit side is the corollary of
the debit side.
