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Profit and Loss › Trial balance
Trial balance, and why it does not agree
The list of every account that sits between the books and the final accounts, with an example and the usual reasons for a difference.
What a trial balance is
A trial balance lists every account with its balance on one date: debit balances in one column, credit balances in the other. In double entry every transaction has an equal debit and credit, so the two columns must add up to the same total. It is the step between the books and the final accounts: each line is then placed under a heading of the profit and loss or the balance sheet.
| Debit side | Credit side |
|---|---|
| Assets: cash, bank, customers who owe you, furniture, advances | Capital, loans, suppliers you owe, GST and TDS payable |
| Expenses and purchases, sales returns, opening stock | Income and sales, purchase returns |
| Drawings |
The shop's trial balance on 31 March 2026
| Account | Debit (₹) | Credit (₹) |
|---|---|---|
| Capital | 3,00,000 | |
| Drawings | 75,000 | |
| Sales / Sales returns | 20,000 | 12,00,000 |
| Purchases / Purchase returns | 9,00,000 | 10,000 |
| Opening stock | 1,50,000 | |
| Interest received | 5,000 | |
| Salary | 96,000 | |
| Interest on bank loan | 12,000 | |
| Depreciation | 15,000 | |
| Rent, electricity, bank charges, miscellaneous | 87,000 | |
| Furniture (after depreciation) | 1,35,000 | |
| Customers who owe you / Suppliers you owe | 1,40,000 | 1,20,000 |
| Cash in hand / Bank | 1,13,000 | |
| Advance to staff | 10,000 | |
| Bank loan | 1,00,000 | |
| GST payable / TDS payable | 18,000 | |
| Total | 17,53,000 | 17,53,000 |
Closing stock (1,80,000) is not in the trial balance: it is counted at the end and goes into both statements, as inventories in the balance sheet and as a reduction of the cost of goods in the profit and loss.
When the two totals are not equal
- Opening balances missing. The cash, bank, loans or capital you started with were never entered. Add them; most software calls the gap "difference in opening balances".
- A one-sided entry. Depreciation entered as an expense but not taken off the asset, or a loan received but not entered in the bank.
- An amount typed wrongly. A difference that divides exactly by 9 often means two digits swapped (5,400 typed as 4,500).
- An entry on the wrong side makes a difference of twice the amount: look for a line of half the difference.
A trial balance that agrees can still hide mistakes, for example an expense posted to the wrong account, or an entry left out completely.