Guide to Trial Balance Sheets
Share this article:
Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
What Is a Trial Balance Sheet?
How Trial Balance Sheets Work
What Trial Balances Include
Assets Equity Income Gains Liabilities Expenses Losses
Undetectable Errors in a Trial Balance
Reversal Omission Original entry Commission Principle
Errors of Reversal
Errors of Omission
Errors of Original Entry
Trial Balance Sheets vs Balance Sheets
Examples of Trial Balances
Preparing a Trial Balance
Create a table with three columns entitled (from left to right): Account Name, Debits, and Credits. An optional fourth column (placed to the left of Account Name), would be Account Number. Use the company’s chart of accounts to locate all of the account names and list them in the Account Name column (if desired, include account numbers in the appropriate column). Go to each account and add up all of the debits and credits during the accounting period. Subtract the smaller number from the larger number and place the remainder in the appropriate column. For example, if the cash account had a total of $6,000 in debits and $5,000 in credits, you would place $1,000 in the debits column. Total each column and put the numbers at the bottom. If the totals are the same, your trial balance is balanced.
3 Small Business Loan Tips
Generally, it can be easier for entrepreneurs starting out to qualify for a loan from an online lender than from a traditional lender. Lantern by SoFi’s single application makes it easy to find and compare small business loan offers from multiple lenders. If you are launching a new business or your business is young, lenders will consider your personal credit score. Eventually, though, you’ll want to establish your business credit. SBA loans are guaranteed by the U.S. Small Business Administration and typically offer favorable terms. They can also have more complicated applications and requirements than non-SBA business loans.
Frequently Asked Questions
About the Author
Share this article: