Factors to be Considered in Preparing of the Trial Balance

Which factors should be considered in the preparation of the Trial Balance?

The Prime objective of the trial balance is to test and verify the arithmetical accuracy of accounts and that is why special attention is given and some important factors are also considered in case of including balances from the ledger to the trial balance.

Factors 1:

 Assets, Expenses, Losses=Debit and Profit, Revenue, Liabilities, Capital= Credit

Factors 2:

It is necessary to be careful about the recording of the stock of goods. Value of the opening stock of goods recorded in the debit column as expense in trial balance for the date is prepared for.

Factors 3:

While “Adjusted Purchase” or “Cost of Goods Sold” include in the trial balance, then closing stock of goods will be shown in the debit column of trial balance as assets without including the opening stock of goods. Because of 

Adjusted Purchase =Opening stock of goods + Net purchase – Closing stock of goods.

 Factors 4:

In the case of stock of stationary, Opening stock of stationary have to be shown in debit column of Trial Balance but the closing stationary will not be included.

 Factors 5:

Opening balance of current assets and liabilities i.e. cash in hand, bank balance, debtors, creditors, etc. will not come in trial balance because these are adjusted with related accounts closing balance.

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Factors 6:

Reserve created against assets, such as-bad debts reserve or provision for doubtful debts, provision for discount on debtors or provision for discount payable and provision for discount on bills receivable record in the credit of the trial balance.

Factors 7:

Provision created against liabilities, such as provision for discount on creditors or provision for discount on creditors or provision for discount receivable and provision for discount on bills payable.

As per the ‘conservatism convention’ of Accounting, it is inappropriate to charge provisions against liabilities. If such provision is found in accounts, it may write in debt column of trial balance. It is best to skip charging provisions on liabilities.

Factors 8:

In some account titles paid or received are not mentioned. In this case, they are considered as an expense and written on the debit side of trial balance, Such as rent, discount, commission, interest, etc.

Factors 9:

Sales ledger balance is considered as sundry debtors or Accounts receivables and put on the debit side.

Factors 10:

Purchase ledger balances are considered as sundry creditors or accounts payables and put on the credit side.


Contingent liability and anticipated assets are not included in trial balance because business is not confirmed regarding their certainty. They are shown within the footnote.

Factors 11:

If any disagreement is found, even after taking all necessary careful measures, then suspense account is opened temporarily to equal debit and credit columns.

A suspense account is not a permanent kind of solution rather it is a temporary arrangement.

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