Trial balance format

The standard format

1. Account name column
2. Debit column (assets, expenses, drawings)
3. Credit column (liabilities, capital, income)
4. Equal totals

Filled example

Notes

• Assets, expenses and drawings are debit balances.
• Liabilities, capital and income are credit balances.
• Equal totals show arithmetical accuracy but do not prove the books are error-free.

Building and reading this format

The trial balance rests on double entry. Every transaction is recorded twice, once as a debit and once as a credit. If the books are right, total debit balances equal total credit balances.

The trial balance is a checkpoint that tests this. It is not a financial statement and shows no profit by itself.

Take the closing balance of every ledger account and place it in the debit or credit column by its normal nature. Assets and expenses are debit balances: premises, equipment, inventory, trade receivables, cash, purchases, wages and rent. Liabilities, capital and income are credit balances: capital, trade payables, loans and sales.

Drawings is not an expense, but it is a debit balance because it reduces capital. Many students miss this. Returns go on the opposite side to the account they relate to.

Returns inwards is a debit and returns outwards is a credit. Then total both columns and compare.

If the totals differ, the size of the gap is a clue. A difference divisible by nine often means two digits were swapped, such as RM540 written as RM450.

A difference equal to one balance suggests that item was left out of one column. A difference that is double a balance suggests an item went in the wrong column.

Equal totals give only limited assurance. A trial balance will not reveal a transaction left out completely or an entry posted to the wrong account of the same type. It also misses a debit and credit that were reversed, and two errors that cancel each other out.

So a balanced trial balance is reassuring but never proof that the books are error-free.

Column mistakes cost the most marks. Purchases sounds like something owed to suppliers, but it is an expense, so it is a debit. Sales is income, so it is a credit.

Drawings is a debit. Totalling only one column, or leaving out "as at" and the date in the heading, also loses marks.

Head the page "Trial balance as at" plus the date. Label the columns debit and credit.

Any consistent order of accounts is accepted. Rule off both totals on the same line so the equality is easy to see.

If your trial balances keep refusing to agree, we can help. One of our teachers can work through your answer with you and show you how to hunt down the error quickly. Book a trial class

Related how-to

• How to prepare a trial balance

These formats are standard accounting practice with our own figures. Check your board's exact requirements on the exam boards page.