2. Balance Method

Balance method of preparing trial balance is very common. It is prepared with the help of ledger balances. First of all, all ledger accounts are balanced at the end of the year. A balance is the difference between the two sides of an account. If the debit side of an account is bigger, then insert the difference on the credit side of the account but it is known as 'debit balance'. On the other hand, if credit side of an account is bigger, then insert the difference on the debit side of the account. It is known as 'credit balance'. Now, the debit balance shall be entered in the debit and credit balance in the credit column of trial balance. The total of both debit and credit side must be equal.

1. Total Method

Under this method, trial balance is prepared with the debit and credit totals of all the ledger accounts. First of all, totals of all ledger accounts are found. Later on, debit totals of ledger accounts are transferred to debit column of trial balance and credit totals are transferred to credit column of trial balance. After then, the sum of both debit and credit columns of trial balance are found. The grand total of both columns should be equal. This method of preparing trial balance is not popular because it does help on preparation of final accounts. Final accounts are prepared from the ledger balances but not from totals of debit and credit.

Methods of Preparation of Trial Balances:

A trial balance may be prepared under following three methods:

1. Total Method.
2. Balance Method.
3. Mixed Method.
   

Ruling of Trial Balance

Trial balance does not have any special format. It is simply a vertical presentation of ledger balance in the form of the table. Serial number, names of the ledger accounts, ledger folio, debit ledger balance and credit balance are kept on the trial balance.