4 Financial Accounting · 4.3 Bank reconciliation and trial balance
4.3.2 Trial balance: methods, preparation and limitations
A trial balance is a statement of the debit and credit balances (or totals) of all ledger accounts on a given date; because every transaction has an equal debit and credit, its two sides should agree, which checks the arithmetical accuracy of the books but does not prove they are free of error.
- APPSC Paper I
- Advanced level
- 9 min read
- Full course
Key terms
- trial balance
- total method
- balance method
- compound method
- debit balance
- credit balance
- arithmetical accuracy
- suspense account
- errors not disclosed
- error of principle
- compensating error
- error of omission
- error of commission
- limitations of trial balance
What this note covers
- Core factsFoundation
- ExplainedStandard
- DeeperAdvanced
- Mains writingMains writing
- Common trapsFoundation
- Quick revisionFoundation
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