The Trial Balance
Because of the number of entries made in the books, there is a need to check their accuracy. This is called The Trial Balance. It consists of taking and listing every balance in the ledger at that date.
The trial balance is an arithmetic check of the double entry system. So it is checking that both aspects of every transaction been recorded accurately; that for every debit entry, is there an equal value for its corresponding credit.
The total debits should equal the total credits. The trial balance will fail to balance if both aspects of a transaction are not recorded.
It may at first sight appear that if the trial balance actually balances then the books are correct. This ,however, is quite wrong. It just means that both a debit and credit entry has been made for each transaction. It does not guarantee that the entry itself is correct.
If the trial balance does not balance, then you should first check that there are no errors in the addition of each account, check that there is an entry in both a debit and credit account and that the same figure was entered for both the debit and credit entry.
There are errors that can be made in accounts which will not be highlighted with a trial balance. For example if a transaction is completely omitted from the books and it was not entered either as a debit entry or credit entry, then the trial balance would still balance. If there were two entries made but one of them was made into the wrong account, the books would still balance. If the entries were made on the wrong side of the account for both entries then, again , the books would still balance.
Sourch:
http://www.bized.co.uk/
Comments
Post a Comment
Silahkan tulis komentar anda, gunakan bahasa yang baik dan enak dibaca. Terimakasih...!