Procedures of Preparation to Trial Balance

The trial balance is prepared on daily or monthly or yearly basis as per the requirement of the business. It is prepared on a given specific date on a separate sheet of paper. There are three methods of preparing a trial balance. They are:

1. Total method: Under this method, the trial balance is prepared with all the debit and credit totals of the ledger accounts.
2. Balance method: Under this method, the trial balance is prepared with all the debit and credit balances of the ledger account.
3. Compound method: Under this method, the trial balance is prepared both with the total and balance of all the ledger account. It is a combination of total and balance method which is also known as total cum balance method.

Generally, the trial balance is prepared by using the balance method. Under the trial balance, first of all, the transactions are recorded either in journal or subsidiary books. Then, the balances are obtained after posting into the ledger. At last, the trial balance is prepared with the help of the obtained ledger balances.

Specimen of Trial Balance