A trial balance lists each ledger balance on its normal side and checks that the debit total equals the credit total. The work is placing every balance correctly, and then adding each column twice.
This lesson opens the trial balance guide. Afterwards, finding errors that disturb agreement covers what to do when the columns differ.
Which side does each account go on?
| Debit balance | Credit balance |
|---|---|
| Assets (bank, cash, debtors, equipment) | Liabilities (creditors, loans) |
| Expenses (rent, salaries, purchases) | Income (sales) |
| Drawings | Capital |
Worked example: Kedai Maju at 31 December
List the closing balance of each ledger account, then place each one. All amounts are in RM.
| Account | Debit | Credit |
|---|---|---|
| Bank | 8 400 | |
| Cash | 600 | |
| Debtors | 5 200 | |
| Furniture | 9 300 | |
| Purchases | 18 400 | |
| Rent | 2 400 | |
| Salaries | 6 000 | |
| Drawings | 4 000 | |
| Creditors | 3 800 | |
| Sales | 26 500 | |
| Capital | 24 000 | |
| Total | 54 300 | 54 300 |
Check the debit column: 8 400 + 600 + 5 200 + 9 300 + 18 400 + 2 400 + 6 000 + 4 000 = 54 300. Check the credit column: 3 800 + 26 500 + 24 000 = 54 300. The columns agree.
The mistake that costs marks
A frequent slip is to put Drawings in the credit column, because it sounds like the owner’s capital. Watch what happens to the totals.
| Column | Correct | With the slip |
|---|---|---|
| Debit | 54 300 | 50 300 |
| Credit | 54 300 | 58 300 |
| Difference | 0 | 8 000 |
The difference is 8 000, which is exactly 2 × 4 000. An item on the wrong side moves one total down and the other up by the same amount, so the gap is always double the item. Halving the difference points you at a balance of 4 000 to check.
Check yourself
The balances of a small business are: Cash 1 500, Equipment 5 000, Purchases 6 200, Wages 1 900, Sales 9 800, Creditors 1 400, and Capital. Find the capital that makes the trial balance agree.
Answer
Debit balances: Cash 1 500 + Equipment 5 000 + Purchases 6 200 + Wages 1 900 = RM14 600.
Credit balances without capital: Sales 9 800 + Creditors 1 400 = RM11 200.
Capital: 14 600 − 11 200 = RM3 400, placed in the credit column.
What to study next
The next lesson, finding errors that disturb agreement, gives you tests for a difference. Then use the trial balance practice set.
The debit-credit transaction trainer helps you place balances on the right side. A teacher can go through your layout in online one-to-one Accounting tuition.