PREPARATION OF THE TRIAL BALANCE

The preparation of the trial balance is classified on the basis of three different accounts
viz
l Real Account (R)
l Nominal Account (N)
l Personal Account (P)
The classification of the transactions not only on the basis of accounts but also on the
basis of payments and receipts. These payments and receipts classification further
segmented into following categories
Payments category - Debit Balance
Debit Balance is the source of following golden rules of the three different accounts
Personal Account - Debit the Receive
Nominal Account-Debit all the expenses and losses
Real Account - Debit what comes in & Debit all assets
l Trading Expense Category (TE)
l Profit and Loss Category (PL)
l Assets- Balance Sheet (BA)
Receipts category-Credit Balance
Credit Balance is the major source of other half of the golden rules of accounting
Personal Account-Credit the Giver
Nominal Account- Credit all income and gains
Real Account- Credit what goes out & Credit all liabilities
l Trading Income Category (TI)
l Profit and Loss Category (PL)
l Liabilities - Balance Sheet (BL)

The detailed Proforma of the trial balance is given in the Annexure -I for better Trial Balance
understanding
The following trial balance of the Sundar firm is prepared from the previous list of
journal entries and ledger accounting balances.

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