Trial Balance

Trial Balance

Trial Balance is best understood when you have an in depth understanding of the Double Entry System.

In double entry system/method;
– for every entry in the debit side, there is a credit entry
– for every entry in the credit side, there is a debit entry

Assuming that in a month, a business starts drawing out it’s trial balance. No matter how many transactions that a business has, the trial balance will always be balanced. I.e. Debit side = Credit side.

Students are often confused on where to put different transactions into which side. Well, I am going to tell you right now, which most textbooks didn’t teach you. As a general rule:

For Debit Side, remember PEDARI
– P for Purchases
– E for Expenses
– D for Debtors
– A for Assets
– RI for Return Inwards

As for Credit Side, remember SCROLG
– S for Sales
– C for Creditors
– RO for Return Outwards
– L for Liabilities
– G for Gains

All thanks to my secondary school teacher that makes this the most useful information in my whole accounting education.

Format of Trial Balance

I will reexplained some of this as we moved on, as for now just remember the rule. And note that, this is a general rule. Students should know which transactions to be posted into the relevant categories.

Last updated on 11/11/2017 – Edited grammatical errors.