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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

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    • profile image

      Johnd700 2 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

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      Robert Burger 2 years ago

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

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      kats 2 years ago

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

    • profile image

      AamnaKhalid 2 years ago

      It is very useful .. Thanks ...

    • profile image

      Kus Kus 22 months ago

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

    • profile image

      Obama 21 months ago

      just a normal person here no need to say something

    • profile image

      ala zubbi 21 months ago

      Thanks very helpful

    • profile image

      Amber 19 months ago

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

    • profile image

      Kumar 18 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

      PATRICK 17 months ago

      Good

    • profile image

      Faar 17 months ago

      Useful

    • profile image

      nadine 17 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

      Samuel 10 months ago

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

    • profile image

      Hitler 8 months ago

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

    • profile image

      andreas 6 months ago

      helpful

    • profile image

      preethi 6 months ago

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

    • profile image

      Samaira 5 months ago

      the totals were not equal in my case...

      but I got all of them correct...

    • profile image

      Aartee 4 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.

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      Daphne 3 months ago

      What is the difference between expense and liability?

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      parag 3 months ago

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

      expense is direct approach.

      liability is something you have to pay.

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      student1 4 weeks ago

      thank you, this was very helpful

    • profile image

      Tabassum 4 weeks ago

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

    • profile image

      Lolade 6 days ago

      This article was so helpful. Thanks.

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