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Module 1: Préparation des rapports

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Préparation de rapports : la Balance de vérification

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Accounting - Preparation of reports: the trial balance

The trial balance

At the end of the accounting period ledger accounts are closed off if they
are revenue or expense items, and balanced if assets, liabilities or owners
equity items.

There are two presentations of the trial balance: the pre-trial balance
and the post trial balance. The distinction between the two is easily seen
when preparing the '10 column worksheet', in the next topic. The post
trial balance occurs after balance day adjustments.

The purpose of the trial balance is to compile all the ledger account
totals and balances in order to confirm the accuracy of the recording
process. Assets and expenses are listed in then debit column while
revenue, liabilities and owners equity items are shown in the credit
column. Negative items are also shown. Accumulated depreciation of
non-current assets is shown on the credit side and drawings are shown on
the debit side of the trial balance.

It is possible for the trial balance to balance and yet be incorrect.
Recording errors will not necessarily be detected by carrying out a trial
balance.

Examples of errors not detected by a trial balance:

* a complete entry has been omitted from the ledger

* an amount has been placed in the wrong account. For example, $300 paid
wages should have been included as cleaning expense

* a compensating error has been made. For instance, both sales and
purchases have been overstated by $100

* a money amount has been listed incorrectly

* debit and credit entries have been reversed. A debtor has paid us
money, yet debtors are incorrectly debited and bank wrongly credited

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