The trial balance template is an organized template in Excel, Google Sheets, and Open Office Calc that makes you able to build statements of all ending balances of ledger accounts on a specific date.
Trial balance plays a key role in the company’s financial department, it reports on ending & debit & credit balances in every account at the terminating reporting time. This report acts as a history of financial statements of your company and assists you in proper accounts management.
The trial balance format contains two columns; the debit balances listed in one column and credit balances listed in the other. Once the trial balance is created, the debits and the credits, the next step is to make the financial statements. You may also like Direct Deposit Form Template.
Bookkeepers and accountants use a trial balance template to combine and integrate all the T- accounts into one document. It can be used by Accounts Assistants, Accountants, and Auditors.
Types of Trial Balance:
Here are three types of trial balance.
- Unadjustable trial balance
Unadjusted trial balance is the initial and foremost document to be made for final accounts. It must be prepared before passing any adjustable entries.
- Adjustable trial balance
Adjustable trial balance is prepared to know about the adjustment entries passed are correct or not after making all the adjustments.
- Post-closing trial balance
Due to adjustable and unrecorded entries, the balances of the ledger may be changed sometime. This trial balance helps you to attach opening balances for the upcoming accounting year. You should also check Blank Check Template.
Why you have to make a trial balance:
Here are three reasons for making a trial balance;
- It is the first step regarding the annual closing.
- It can help you to analyze, improve, and balance debit and credit entries of account books according to the double-entry system.
- It extracts the account balances from the ledgers by ensuring correctness.
Contents of Trial Balance Template
Trial balance template comprised of two sections:
- Header section
- Data Input section
Header section: It contains the heading of the sheet with the date of preparation. Moreover, on the right-hand side, there is a difference in Debit and Credit amounts.
Data Input section: It contains all the accounting heads from the account book. Here, you insert the closing balances of all the accounting heads. You may also see Audit Report Template.
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Benefits of Trial Balance Template:
Here are the benefits of trial balance;
- Prove Arithmetic Correctness:
Trial balance proves the arithmetical correctness of the ledgers by comparing credit and debit balances. If these balances are similar it assures that the transaction records are accurate.
- Locating account errors:
Trial balance assists you to detect accounting errors by comparing both credit and debit balances, if there is a difference in both balances, it indicates an error in the ledgers.
- Provides transaction summary:
It is recognized as a summary report of the ledger because it provides summary transaction records of different book accounts.
- Preparing final accounts:
Trial balance plays a vital role in the final accounts of the business. It brings all the balances of different ledger accounts into one document.