Describe the methods of preparing the Trial Balance.

There are two methods of preparing a Trial Balance:

• Balance method: In this method, only the debit or credit balances are entered separately in two columns. This is known as the Net Trial Balance. This is the commonly used method of preparing a Trial Balance because it facilitates the preparation of the final accounts.
• Total Method: In this, the total of each side of the account is entered respectively in the debit and credit columns of the Trial Balance. Such Trial Balance is known as the Gross trial Balance.