Easy Steps To Prepare A Trial Balance For Accounting
Having a business means there are a lot of things you have to take into account- like literal account. Without having the know-how of accounting and related concepts, you are not able to have a successful business.
Firstly you have to maintain a file with all records related to accounting and business in any possible way. The file usually has information related to transactions of all accounts organized by account type. The sheet will be detailed listing every item.
Once you have completed all ledge entries, then the next step is to start preparing for the trial balance. When you are not sure on how to prepare trial balance for your business effectively, then you can take on the expert assistance from bookkeeping and accounting firms in Dubai to proceed with the accounting cycle.
This article is going to guide on the elements and steps to prepare a trial balance.
How To Prepare A Trial Balance? 4 Easy Steps!
Trial balance is the verification step for the ledge sheet, and verification is to know that debits in the sheet are equal to credit for the accounts which are listed. It is all about numbers so a slight mistake can cost you a lot. In other words, it is kind of bookkeeping worksheet. There are two primary methods for preparing a trial balance; total method and balance method.
Following are some easy steps for preparing trial balance for your company accounts:
Step 1: Organize The Ledger Accounts
Because most of the trial balance is based on the ledge sheets, so the first step is to open the charts of the ledger account and organize them properly. Usually, the organization will be by the account number most probably of four digits.
Step 2: Create A Four Column Table
Once you have the account numbers sorted, then the next step is to have a four column table. The column should have the account name (maybe 4-digits one), name of the account, debit information and lastly the credit information of the account. Next is to start filling in the table.
Step 3: Run A Trial Balance
Once you have all columns ready, then start filling them according to the account numbers. After each entry check if the debit information equals to credit information. If it is equal then good news you can move onto the next account. But what happens if the debit and credit information is not the same? Simply there is an issue in the ledge sheet, and you need to go back and check that.
Step 4: Final Check
Once you have checked the ledger mistakes and corrected them, then it is time that you give a final check to the columns just to make sure there are no more errors. It is suggested to update the trial balance every week, and only experts should do that.
If you are based in UAE, then you can easily find out the best bookkeeping and accounting firms in Dubai to complete or prepare your trial balance.
Concluding Notes!
Trial balance can drive you nuts, so it is better to go step by step about it. Deal with numbers only when you are calm and composed because they can easily mix up.
Learn more about Accounting Management.