Personal accounts and trial balance

As the title of the subject implies, accounting is all about counting. We use different financial statements and methods to count or record data. Like wise, the information we recorded in the daily journal (previous lecture), we now need to make individual personal accounts for all the parties involved in that journal and balance off their accounts to see which account has credit balance and which as debit balance.

The format of a personal account is as follows

Date Detials Amount (Dr) Date Details Amount (Cr)


For instance just consider the example of the following journal and just 3 of its many personal accounts:

Date Particular L/F Debit(Dr) Credit(Cr)
01.11.2011 Cash account   $1,000  
          Mr.asif’s account     $1,000
  Cash account   $51000  
         Capital account     $51000
  Started business      
11.11.2011 Toyota Motors   $5600  
          Bank account     $5600
  Bought van from Toyota motors      
16.11.2011 Purchase account   $2000  
          Cash account     $2000
  Purchased from admiral traders      
17.11.2011 Purchase account   $400  
         F.K traders     $400
  Bought goods from FK traders on credit      
17.11.2011 Cash account   Rs.550  
      Sales account     Rs.550
  Sold goods on cash      
18.11.2011 Mr.aun’s account   $600  
           Sales account     $600
  Sold goods to MrAun on credit      
19.11.2011 Sales return account   $500  
         Mr.Aun’s account     $500
  Mr. Aun returned goods due to a fault      
20.11.2011 Bank account   $550  
       Cash account     $550
  Deposited into the bank      


Date Details Amount (Dr) Date Details Amount (Cr)
11.11.11 Toyota motors $5600   Blance c/d (carried down) $5600
    $5600     $5600



Date Details Amount (Dr) Date Details Amount (Cr)
16.11.11 Purchased goods on cash $2000      
17.11.11 Purchased from FK trader $400   Balance c/d $2400
    $2400     $2400


Mr.Aun’s Account

Date Details Amount (Dr) Date Details Amount (Cr)
20.11.11 Bought goods $600 17.11.11 Returned goods $500
        Balance b/c $100
    $600     $600


*B/b or balance brought down is the money carried forward in hte same account from the previous month to the present month’s account record.

*b/c or balance carried down is the money or balance which has to be carried down into the account records of the same account for the next month.

If b/c is Cr then b/d of the next month would be Dr.

Now that you know how to make personal accounts, lets move a step forward.

Lets talk about Trial Balance.

Trial balance is a financial statement showing the totals of all the accounts in a journal. As the name suggests, its basic aim is to check and ascertain that all the entries are correctly made into all the accounts.  Another variation of the accounting equation is TOTAL DEBIT = TOTAL CREDIT. Trial balance is based on this equation. If all the entries are correctly made, the debit side’s total would be equal to credit side’s total.

Format of the trial balance is as follows



Trial balance of the above mentioned example would be something like this… (just mentioning the3 accounts made)

1 Purchase   $2400  
2 Motor vehicle   $5600  
3 Mr.Aun’s account   $100  






The trial balance would go on till all the entries have been made and till both the totals are equal.

NOTE : Trial balance only shows the errors that upset the total. For example if you have completely omitted a transaction, the trial balance would still balance and the error would not be highlighted.