Question

Heather works in the accounting department of Colorado Manufacturing. Today she will use the firm's ledger to summarize information that was posted over the most recent time period. Her goal is to determine if the accounts are balanced as required by the double-entry method of bookkeeping. To be sure they are correct, Heather will prepare a(n):

Answer 1

To be sure they are correct, Heather will prepare a trial balance

What is a trial balance?

A trial balance is arithmetic testing of the accuracy of ledger postings, where transactions posted into the ledgers are summarized to determine the correctness of the postings carried out.

In the trial balance, the asset balances are debited whereas the liability balances, such as accounts payable, loans payable, long-term debt  as well as mortgage payable would be credited since an increase in liability means that obligations owed by the firm in question has increased and would be shown as corresponding increase in the affect liability accounts.

On the flipside, the increase in expenses are debited whereas the increase in income  is to be credited to the respective income accounts such as sales revenue.

In essence, to be sure the postings are accurate , Heather will prepare a trial balance.

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