Pre-Closing Trial Balance - Courses for Crammers

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The Pre-Closing Trial Balance enables us to ensure that our total debits equal total credits.

We must do this before moving into preparing other important financial statements (income statement, statement of owner's equity, balance sheet, etc.).

Scenario: Given the below General Ledger, create the Pre-Closing Trial Balance.

CASH

Date	Description	Debit	Credit	Balance
3-1	Beginning Balance	$1,500		$1,500 (Dr)
3-1	New lemon squeezer		$1,000	$500 (Dr)
3-5	Borrow a loan from local bank	$500		$1,000 (Dr)
3-7	Issue common stock shares	$250		$1,250 (Dr)

EQUIPMENT

Date	Description	Debit	Credit	Balance
3-1	Beginning Balance	$500		$500 (Dr)
3-1	New lemon squeezer	$1,000		$1,500 (Dr)

NOTES PAYABLE

Date	Description	Debit	Credit	Balance
3-1	Beginning Balance		$1,000	$1,000 (Cr)
3-5	Borrow a loan from local bank		$500	$1,500 (Cr)

COMMON STOCK

Date	Description	Debit	Credit	Balance
3-1	Beginning Balance		$1,000	$1,000 (Cr)
3-7	Issue common stock shares		$250	$1,250 (Cr)

PRE-CLOSING TRIAL BALANCE

Account	Debit	Credit
Cash	$1,250
Equipment	$1,500
Notes Payable		$1,500
Common Stock		$1,250
Totals	$2,750	$2,750

Since our total debits equal $2,750 and our total credits also equal $2,750, this means we're in good shape to move forward with the accounting process!

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