Different methods in preparation of Trial Balance

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Methods for preparation of trial balance:-

 The different methods of preparation of trial balance are:

1) Total method

2) Balance method

3) Total and Balance method


Total method

      Under this method, every ledger account is totaled and that amount is transferred to trial balance. In this method, trial balance can be prepared as soon as ledger account is totaled. Time taken to balance the ledger accounts is saved under this method as Balance can be found out in the trial balance itself. The different of totals of each ledger account is the Balance of that particular account. This method is not commonly used as it cannot help in the preparation of the financial statements.


Balance method

   Under this method, every ledger account is balanced and those balances only are carrying forward to the trial balance. This method is used commonly by the accountant's and helps in the preparation on the basis of the balances of the ledger accounts.


Total and Balance method

Under this method the above two methods are combined. Under this method statement of trial balance contains seven columns instead of two columns


Rules of preparing the Trial Balance

      While preparing the Trial balance from the given list of ledger balances, following rules should be taken into care:


a) The balances of all (I) assets accounts (ii) expenses accounts (iii) losses (iv) drawings (v) cash and balances are placed in the debit column of the trial balance.


b) The balances of all (I) liabilities accounts (ii) income accounts (iii) profits (iv) capital are placed in the Credit column of the trial balance.

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