The ledger and the trial balance
Journal entries are posted to ledger accounts, and each account is balanced off. The balances are listed in a trial balance, where total debits must equal total credits.
Posting and balancing off
Posting means copying each journal entry into the ledger. The debit amount goes on the debit (left) side of one account and the credit amount on the credit (right) side of the other. In each account write the date, the name of the other account and the amount. To balance off, add both sides, write the difference on the smaller side as balance c/d (carried down), total both sides, and bring the balance down on the opposite side as balance b/d (brought down).
Worked example: Cash account of Kamal Traders (Rs.)
| Dr: date and details | Rs. | Cr: date and details | Rs. |
|---|---|---|---|
| 1 Apr Capital | 800,000 | 3 Apr Bank | 600,000 |
| 15 Apr Sales | 95,000 | 28 Apr Salaries | 45,000 |
| 30 Apr Drawings | 20,000 | ||
| 30 Apr Balance c/d | 230,000 | ||
| Total | 895,000 | Total | 895,000 |
| 1 May Balance b/d | 230,000 |
Worked example: balance the other accounts
Using the Kamal Traders journal for April 2026, find the balance on each remaining ledger account.
- Cash (check): Dr 800,000 + 95,000 = 895,000; Cr 600,000 + 45,000 + 20,000 = 665,000; balance 895,000 − 665,000 = 230,000 Dr.
- Bank: Dr 600,000 + 100,000 = 700,000; Cr 120,000 + 150,000 = 270,000; balance 700,000 − 270,000 = 430,000 Dr.
- Lanka Wholesalers: Cr 250,000; Dr 150,000; balance 250,000 − 150,000 = 100,000 Cr (still owed).
- Ruwan Stores: Dr 180,000; Cr 100,000; balance 180,000 − 100,000 = 80,000 Dr (still receivable).
- Sales: Cr 180,000 + 95,000 = 275,000 Cr.
- Single-entry accounts: Capital 800,000 Cr; Furniture 120,000 Dr; Purchases 250,000 Dr; Salaries 45,000 Dr; Drawings 20,000 Dr.
Cash Rs. 230,000 Dr, Bank Rs. 430,000 Dr, Lanka Wholesalers Rs. 100,000 Cr, Ruwan Stores Rs. 80,000 Dr, Sales Rs. 275,000 Cr.
Trial balance of Kamal Traders as at 30 April 2026 (Rs.)
| Account | Debit | Credit |
|---|---|---|
| Cash | 230,000 | |
| Bank | 430,000 | |
| Furniture | 120,000 | |
| Purchases | 250,000 | |
| Ruwan Stores (receivable) | 80,000 | |
| Salaries | 45,000 | |
| Drawings | 20,000 | |
| Capital | 800,000 | |
| Lanka Wholesalers (payable) | 100,000 | |
| Sales | 275,000 | |
| Totals | 1,175,000 | 1,175,000 |
Worked example: an error that shows in the trial balance
Check the Kamal Traders trial balance totals. Then suppose the clerk had posted the salaries of Rs. 45,000 to the Salaries account as Rs. 54,000 (the Cash account was correct). What would the trial balance show, and how is it corrected?
- Correct totals: debits 230,000 + 430,000 + 120,000 + 250,000 + 80,000 + 45,000 + 20,000 = 1,175,000; credits 800,000 + 100,000 + 275,000 = 1,175,000.
- With the error, debits = 1,175,000 − 45,000 + 54,000 = 1,184,000; credits stay 1,175,000.
- Difference: 1,184,000 − 1,175,000 = 9,000. Put it in a suspense account (credit side) until the error is found.
- Error found: 54,000 − 45,000 = 9,000 too much debited to Salaries.
- Correcting entry: Dr Suspense 9,000; Cr Salaries 9,000. Suspense is now zero and both totals are 1,175,000.
Dr Suspense Rs. 9,000, Cr Salaries Rs. 9,000. A difference divisible by 9 often points to a transposition (54 written for 45).
Errors that do NOT affect the trial balance totals
- Omission: a transaction left out completely.
- Commission: the right type of account but the wrong person, e.g. posted to Ravi instead of Ruwan.
- Principle: the wrong type of account, e.g. furniture debited to Purchases.
- Original entry: the wrong amount used for both the debit and the credit.
- Complete reversal: the correct accounts, but debit and credit swapped.
- Compensating errors: two errors that cancel each other out.
In a Sri Lankan SME the accountant extracts a trial balance every month, before the owner meets the bank manager. A trial balance that does not agree is the first sign that an entry was missed or mis-posted.
Short answer: “What is a trial balance?” A list of all ledger balances at a date, debits in one column and credits in another; the two totals should agree.
Structured question: “State five errors that are not revealed by a trial balance, with examples.” Omission, commission, principle, original entry, complete reversal, compensating: one rupee example each.
Essay: “Post the given journal to the ledger, balance the accounts and prepare a trial balance.” Open T-accounts, post each entry, balance off with c/d and b/d, then list the balances in a trial balance with equal totals.
Errors the trial balance cannot catch, O-C-P-O-R-C: Omission, Commission, Principle, Original entry, Reversal, Compensating.