Accounting · Accounting Process

Trial Balance for CA Foundation Accounting

Updated 1 October 2026 · Fact-checked

A trial balance is a list of all ledger account balances, split into debit and credit columns, prepared on a given date. If the two totals agree, the books are arithmetically accurate. To solve it, classify each balance by nature, place it on the correct side, and total both columns.

Understand Trial Balance

Double entry says every transaction has equal debit and credit. So if you record everything correctly, the total of all debit balances must equal the total of all credit balances in the ledger. A trial balance tests this.

It is a statement, not an account. It lists each ledger account name with its closing balance, in a debit column or a credit column. It is usually prepared at the end of the accounting period, before final accounts.

Its main purposes are: to check arithmetical accuracy of posting, to help locate errors, and to give a base for preparing the Trading and Profit and Loss Account and the Balance Sheet.

Agreement of the totals is only prima facie evidence of accuracy. It is not proof. Some errors do not change the totals, so the trial balance still tallies even though the books are wrong.

Errors not disclosed by a trial balance include: error of omission (a transaction not recorded at all), error of commission such as posting the correct amount to the wrong account on the correct side, error of principle (capital item treated as revenue), compensating errors (equal errors on opposite sides that cancel), and complete reversal of an entry (debit and credit both swapped).

Errors that do affect the totals include one-sided posting, wrong totalling and wrong balancing. Some errors of commission also fall here, for example posting a wrong amount on only one side of an entry.

Key rules to remember

Basic agreement rule: Total of debit balances = Total of credit balances; If the totals differ, there is an error. If they agree, the books may still contain errors that do not affect totals.
Debit balances: Assets, Expenses, Losses, Drawings, Purchases, Sales returns, Prepaid expenses; These normally show a debit balance. Prepaid expenses (an asset) are debit, but they appear in the trial balance only if given in it. Otherwise they are an adjustment for final accounts. This list covers the common items, not every possible one.
Credit balances: Capital, Liabilities, Incomes, Gains, Sales, Purchase returns, Reserves, Provision for doubtful debts, Bank overdraft; These normally show a credit balance. Outstanding expenses (a liability) are credit, but they appear in the trial balance only if given in it. Otherwise they are an adjustment for final accounts. This list covers the common items, not every possible one.
Difference: Difference = Larger total − Smaller total; Put the difference in a Suspense Account on the smaller side only if the question says to, so that the trial balance agrees.

How to solve Trial Balance questions

Use this method for any question that gives ledger balances and asks for a trial balance, or asks which errors it will reveal.

1Read the list of balances and note the date of the trial balance (for example, As on 31st March).
2Classify each item: asset, liability, capital, income, expense or drawings.
3Put assets, expenses, losses and drawings in the debit column. Put capital, liabilities, incomes and gains in the credit column.
4Watch the special items: Sales returns go to debit, Purchase returns to credit, Drawings to debit, Provision for doubtful debts to credit, Bank overdraft to credit, and Closing stock (debit) only if it is given in the trial balance.
5Write amounts in one line against each account name, with a serial number if the question gives many items.
6Total both columns separately and compare.
7If they differ and the question asks, find the difference and show it as Suspense Account on the smaller side.
8For error questions, test each error: does it leave the debit and credit totals unequal? If only one side is wrong, the trial balance disagrees. If both sides are affected by the same amount, or the entry is missing on both sides, it still agrees.

Quickest way: Side-by-side sort and tick

When to use it: Use when a long list of balances is given and time is short.

Draw the two columns first with a heading: Particulars, Debit (₹), Credit (₹).
Go through the list once, top to bottom, and write each item directly in the right column. Do not rewrite twice.
Tick each item in the question as you place it so none is missed.
Add the credit column first (usually shorter), then the debit column.
If the totals differ, check that you did not place a return, a provision or a drawing on the wrong side, as these cause most differences.
For error questions, ask one test: does the error leave debit and credit totals unequal? If only one side is wrong, the totals disagree. If both sides are equally affected, the totals agree.

Common mistakes in Trial Balance

Putting Sales returns in the credit column
Students link the word sales with credit.
Fix: Returns reverse the original. Sales returns are a debit balance, Purchase returns a credit balance.
Treating drawings as an expense or credit item
Drawings reduce capital, so students put it with capital.
Fix: Drawings are a debit balance in the trial balance. Capital is credit.
Saying the trial balance proves the books are correct
Tallying feels like final proof.
Fix: Write that agreement shows only arithmetical accuracy. Errors of omission, principle, compensating errors and many errors of commission remain hidden.
Putting Bank Overdraft or Provision for doubtful debts on the debit side
Students link bank and debtors with assets.
Fix: Overdraft is a liability, and a provision is a credit balance. Both go to the credit column.
Forcing the totals to agree by adjusting a figure
Pressure to show a matching total.
Fix: Show the difference as Suspense Account only if the question asks. Never change given balances.
Saying every error affects the trial balance
Confusing any error with an arithmetical one.
Fix: Only errors that cause unequal debit and credit totals affect it. Wrong totalling of an account or a one-sided entry does; posting the correct amount to a wrong account on the correct side does not.

Worked examples

Example 1

Prepare a trial balance as on 31st March from these balances (₹): Capital 2,00,000; Drawings 15,000; Purchases 1,80,000; Sales 2,60,000; Sales returns 5,000; Purchase returns 8,000; Debtors 60,000; Creditors 45,000; Furniture 50,000; Plant and machinery 2,00,000; Cash 18,000; Rent paid 12,000; Salaries 28,000; Bank loan 55,000.

Show the solution

Debit side: Drawings 15,000; Purchases 1,80,000; Sales returns 5,000; Debtors 60,000; Furniture 50,000; Plant and machinery 2,00,000; Cash 18,000; Rent 12,000; Salaries 28,000.
Debit total: 15,000 + 1,80,000 = 1,95,000; + 5,000 = 2,00,000; + 60,000 = 2,60,000; + 50,000 = 3,10,000; + 2,00,000 = 5,10,000; + 18,000 = 5,28,000; + 12,000 = 5,40,000; + 28,000 = 5,68,000.
Credit side: Capital 2,00,000; Sales 2,60,000; Purchase returns 8,000; Creditors 45,000; Bank loan 55,000.
Credit total: 2,00,000 + 2,60,000 = 4,60,000; + 8,000 = 4,68,000; + 45,000 = 5,13,000; + 55,000 = 5,68,000.
Both totals are ₹5,68,000, so the trial balance agrees.

Answer: Debit total ₹5,68,000 = credit total ₹5,68,000. The trial balance agrees, and no Suspense Account is needed.

Example 2

State whether the trial balance will agree or disagree for each error: (a) Goods purchased for ₹4,000 from Ravi were not recorded at all. (b) Cash received ₹5,000 from Mohan was credited to Mohan but not debited to Cash. (c) Repairs of ₹3,000 to machinery were debited to Machinery Account.

Show the solution

(a) Both debit (Purchases) and credit (Ravi) are missing. This is an error of omission. Totals stay equal, so the trial balance agrees.
(b) Only the credit to Mohan was made. The debit to Cash is missing. Credit exceeds debit by ₹5,000. This is a one-sided error, so the trial balance disagrees.
(c) Debit was given to Machinery instead of Repairs. A revenue item was treated as capital. This is an error of principle. Both sides are the same, so the trial balance agrees.

Answer: (a) Agrees. (b) Disagrees, credit side is higher by ₹5,000. (c) Agrees.

Exam tips

For a trial balance question, present a clean two-column statement with the date in the heading. Examiners give marks for correct placement of each item.
Learn the special items: sales returns (debit), purchase returns (credit), drawings (debit), provision for doubtful debts (credit), bank overdraft (credit) and closing stock (debit, only if given in the trial balance). Outstanding and prepaid expenses go in the trial balance only if given there.
In theory questions on limitations, give at least four errors that stay hidden, each with a short example.
If a difference arises, state the amount and show it as Suspense Account only when the question permits.
For error-spotting parts, write the reason in one line: both sides equal or one side only.

Practice questions from Accounting Process

Trial Balance: frequently asked questions

What is the main purpose of a trial balance?

It checks whether total debit balances equal total credit balances in the ledger. It also gives the base for preparing final accounts. It shows arithmetical accuracy only.

Which errors are not disclosed by a trial balance?

Errors of omission, errors of principle, compensating errors and complete reversal of an entry are not disclosed. Errors of commission such as posting the correct amount to the wrong account on the correct side are also not disclosed. Some commission errors, like a wrong amount posted on one side only, do make the totals differ.

Is a trial balance an account or a statement?

It is a statement. It does not follow the debit and credit format of an account, and it has no balancing figure like a ledger account does.

What if the trial balance does not tally?

Recheck the placement of each balance, the balancing of the ledger accounts and the totals. In an exam, if told to, put the difference to a Suspense Account on the smaller side.