Methods Of Preparing Trial Balance

           Methods Of Preparing Trial Balance

There are three methods of preparing trail balance:

1.Total or Gross Trial Balance.

2.Balance or Net Trail Balance.

3.Total - cum - balance trail balance.

                     Total or Gross Trail Balance

Under this method two sides of all the ledger accounts are totaled up. Thereafter,  a list of all the accounts is prepared in a separate sheet of paper with two "Amount" columns on the right-hand side. The first one for debit amounts and the second one for credit amounts. The total of the credit side and debit side of each account is then placed on "Debit Amount" column and "Credit Amount" column respectively of the list. Finally, the two columns are added separately to see whether they agree or not. This method is not generally followed in practice.

                     Balance Or Net Trail Balance

Under this method first of all the balances of all the ledger are drawn. Thereafter the debit balance and credit balances are recorded in "Debit Amount" column and "Credit Amount" column respectively and two columns are added separately to see weather they agree or not.This is the most popular method and generally followed. 

The various steps involved in the preparation of "Balance Trail Balance"are given below;

1.Find out the balance of each account in ledger.

2. Write up the name of account in the first column.

3. Record the account number in second column.

4. Record the debit balance of each account in debit column and credit balance in credit column.

5.Add up the debit and credit columns and records the totals.