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Pre-Closing Trial Balance

The purpose behind the pre-closing trial balance is simple:

The pre-closing trial balance enables us to ensure that our debits equal our credits before moving into preparing other important financial statements (income statement, statement of owner's equity, balance sheet, etc.).

Outside of that... it's pretty much the same exact thing as the general ledger, just without the journal entries.

All you've gotta do is take the ending balances of each account in the General Ledger...

CASH (Asset)

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

EQUIPMENT (Asset)

DateDescriptionDebitCreditBalance
3-1Beginning Balance$500$500 (Dr)
3-1New lemon squeezer$1,000$1,500 (Dr)

NOTES PAYABLE (Liability)

DateDescriptionDebitCreditBalance
3-1Beginning Balance$1,000$1,000 (Cr)
3-5Borrow a loan from local bank$500$1,500 (Cr)

COMMON STOCK (Equity)

DateDescriptionDebitCreditBalance
3-1Beginning Balance$1,000$1,000 (Cr)
3-7Issue common stock shares$250$1,250 (Cr)

...and place them into a table like so!

PRO TIP: In the general ledger, (Dr) = Debit balance, (Cr) = Credit balance.

PRE-CLOSING TRIAL BALANCE

AccountDebitCredit
Cash$1,250
Equipment$1,500
Notes Payable$1,500
Common Stock$1,250
Totals$2,750$2,750

It's critical to assess whether the total debits equal the total credits! If they do, then you're in good shape!

PRE-CLOSING TRIAL BALANCE

AccountDebitCredit
Cash$1,250
Equipment$1,500
Notes Payable$1,500
Common Stock$1,250
Totals$2,750$2,750