4 terms

Trial Balance Process (Ch. 3)


Terms in this set (...)

Trail Balance
A list of accounts and their balances at a given time.
What is the purpose of a trial balance?
1. The trial balance proves the mathematical equality of debits and credits after posting.
(Under the double-entry system, this equality occurs when the sum of the debit account balances equals the sum of the credit account balances.)
2. A trial balance may also uncover errors in journalizing and posting.
3. A trial balance is useful in the preparation of financial statements.
what are the 3 procedures for preparing a trial balance?
1. List the account titles and their balances.
2. Total the debit column and total the credit column.
3. Verify the equality of the two columns.
what is the order of the trial balance?
1. Assets
2. Liabilities
3. Stockholders' equity
4. Revenues
5. Expenses