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The Trial Balance: Is it a credit or a debit?

Updated on March 10, 2012

The principles of double entry bookkeeping are not easy. It's simple to say that for every debit there is a credit and but when it comes to actually entering transactions into the accounts, it can become tricky to remember if what you are entering is one or the other. It is particularly difficult when you have to enter figures into several accounts (the book of prime entry, the ledger accounts, the control account and the subsidiary ledger).

This article focuses on the trial balance. It is a source of management information and an accuracy check done after the transactions have been input. The trial balance will soon tell you if you've mistyped one entry, forgotten one half of the double entry, or incorrectly balanced an account.

Basic principles

The table below shows the positioning of credits and debits within the general ledger.

Debit
Credit
Drawings
Capital
Assets
Liabilities
Expenses
Income

The trial balance

The trial balance lists the balances of all credits and debits. If the totals are equal then the accounts are correct, as far the trial balance can tell (it will not pick up all possible accounting mistakes). Most of what is on the trial balance is simple enough to fill in when you know what is a debit or a credit in the general ledger. There are, however, a few entries it's easy to be stumped by, so I've laid out a table below that shows where entries should be placed and what category they come under.

Category
Debit
Credit
Income
 
Sales
Expense
Sales return
 
Asset
Sales ledger control
 
Expense
Purchases
 
Income
 
Purchases returns
Liability
 
Purchase ledger control
Income
 
Discount received
Expense
Discount allowed
 
Expense
Wages
 
Expense
Rent
 
Expense
General expenses
 
Asset
Vehicles
 
Asset
Machinery
 
Asset
Office equipment
 
Asset
Property
 
Asset
Stock
 
Asset
Cash in the bank
 
Liability
 
Overdraft
Liability
 
Loans
Liability
 
Tax owing
Asset
Tax rebate due
 
Capital
 
Capital
Drawings
Drawings
 

Hopefully this will give you some help with studying trial balances and don't worry if you forget one in a basic accounting exam- the totals for each column should be equal and any difference will be in a misallocated figure. You should soon be able to work out which one you have entered incorrectly.

Image credit to jannoon028 at www.freedigitalphotos.net

Comments

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    • profile image

      Rishab 3 weeks ago

      If debit side of a trial balance does not tallied with the credit side, where would you place the diffrence and at what side?

    • profile image

      Manav 3 weeks ago

      Where will be an outstanding expense

    • profile image

      Narayan 3 weeks ago

      Permises will be debit or credit

    • profile image

      monbebe 4 weeks ago

      is owner's withdrawal debit?

    • profile image

      soledad 4 weeks ago

      wow thank you so much it helped

    • profile image

      pratvi 5 weeks ago

      insurance will be credit or debit ??

    • profile image

      Sumit Chaurasia 2 months ago

      I like that it is solve my problems very much so it is useful for me..

    • profile image

      Maira 2 months ago

      Bad debts written off come under which column

    • profile image

      Trishanka Debnath 2 months ago

      I found it useful ....Thanks for helping me

    • profile image

      Tokley 3 months ago

      Easy to understand. Thank you

    • profile image

      Indu 3 months ago

      Business premises in trial balance will come under debit or credit

    • profile image

      Victor 3 months ago

      I love it, you really touched where my lecturer did not.

    • profile image

      Arjun Kalia 3 months ago

      Very helpful. Nice post.

    • profile image

      lolitsme 3 months ago

      thank you so so so muchh

    • profile image

      Carolyn 4 months ago

      Gives the reason why, at the time of closure of the accounts for a retail trade, the first is to close accounts that have a debit balance rather than to close accounts that have a credit balance

    • profile image

      Lolade 6 months ago

      This article was so helpful. Thanks.

    • profile image

      Tabassum 7 months ago

      sir Capital is where to write debitside or creditside of trial balance

    • profile image

      student1 7 months ago

      thank you, this was very helpful

    • profile image

      parag 9 months ago

      expense is opposite of income, liability is opposite of asset.

      expense is direct approach.

      liability is something you have to pay.

    • profile image

      Daphne 9 months ago

      What is the difference between expense and liability?

    • profile image

      Aartee 10 months ago

      Income is credited because it is in our nominal account and the rule for nominal account is profits and income credited and loss and expenses debited.

      What comes in debit what goes out credit is the rule of real account in which assets,purchase and sales comes.

    • profile image

      Samaira 11 months ago

      the totals were not equal in my case...

      but I got all of them correct...

    • profile image

      preethi 12 months ago

      how to show in trail balance when an asset is sold ????

    • profile image

      andreas 12 months ago

      helpful

    • profile image

      Hitler 15 months ago

      What about allowance for impairment loss on trade receivables? Is it a debit or credit for this one?

    • profile image

      Samuel 16 months ago

      Thank you I was a nervous about a problem but got a good head start so I ll start afresh.

    • profile image

      nadine 23 months ago

      Hi, is someone can tell me if its possible to have a rate account credit on a trial balance thank you

    • profile image

      Faar 23 months ago

      Useful

    • profile image

      PATRICK 23 months ago

      Good

    • profile image

      Kumar 24 months ago

      Why is income Credited?

      Income is something that we get.And by "Debit what comes in credit what goes out", should'nt it be debited?

    • profile image

      Amber 2 years ago

      So does an account titled simply "vehicles" or anything that says depreciation in it get put in a trial balance?

    • profile image

      ala zubbi 2 years ago

      Thanks very helpful

    • profile image

      Obama 2 years ago

      just a normal person here no need to say something

    • profile image

      Kus Kus 2 years ago

      Interest on Drawing is Income and Interest on Capital is Expense.

    • profile image

      AamnaKhalid 2 years ago

      It is very useful .. Thanks ...

    • profile image

      kats 2 years ago

      interest on drawing and interest on capital come under which column??

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      Robert Burger 3 years ago

      "If the totals are equal then the accounts are correct...". Not necessarily.

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      Johnd700 3 years ago

      Outstanding post, I conceive people should acquire a lot from this web blog its rattling user genial. So much superb info on here dgkdbggdkefd