45. Balanced Accounts.
Whenever an account is settled or balances, particularly a personal account, it should be ruled and footed on that date. If there be but one item on each side, it should be ruled only, as in T. Hunter's account. Any subsequent entries for the closed account should be placed directly under the ruling.
46 (a). Trial Balances.
In Double Entry Bookkeeping, the Journal shows as much in the debtor column as in the creditor column. There is, therefore, as much posted to the debtor side of the Ledger as to the creditor side, so that the total of the debtor side must be equal to the total of the creditor side. If we wish to test the accuracy of the posting, we make a trial to see if the Ledger is in balance. This is called " taking a Trial Balance."
There are two methods of taking a Trial Balance.
By Totals. Total the Ledger accounts in pin-head figures with a hard lead pencil, make a list of these accounts with their respective debtor and creditor totals, then find the two grand totals. These must be equal in amount. See the pin-head totals in the Illustration Ledger.
By Totals and Balances. Write the totals of the loss and gain accounts, and the balances only of the asset and liability accounts. The two grand totals must be equal.
The second method is preferable, since financial statements are made from the Trial Balance and Inventories. The balances of asset and liability accounts are more convenient than the totals ; but in loss and gain accounts, the totals are necessary to obtain the percentage of loss or gain in the respective accounts.
Trial Balance by Totals—Illustration Set.
TRIAL BALANCE, March 30, 19-.