Trial Balance

Some people insist on spelling it as "Trail" balance...don't ask me why!

Why do accountants always ask for the TRIAL balance?

They want it to know that your debits and credits balances out! There is ying and yang, cause and effect and nothing as specific as debit and credit! Not a single cent less!

For every debit, there must be a credit! For example,

Debit Expenses $100
Credit Cash $100

That means cash is taken out and spent on an expense item!

The above entries will be entered into a ledger which we call General Ledger. The auditors/accountants will check the total balance of EACH item in the general ledger and ensure it matches with those in the trial balance.

I wouldn't go into suspense account...etc, but as a prelude, imagine this:

1. Manager says "Jane, give me $200, I need it to make some purchases and buy a drink for a customer".

2. Jane says, "Ok, but remember to bring back the receipts"

3. Manager comes back and hands a stack of receipts to Jane, and says "There's your $200"

4. Jane records the following:

Credit Cash $200
Debit Entertainment $100
Debit Petrol $80
Debt ????? $20!!!!

Oh no! Jane is short of $20! Her trial balance WILL NOT BALANCE!