Trial Balance Order

Trial Balance Order Definition And Meaning | Order of Liquidity

As we know that Trial Balance shows the equality of totals of Debit’s Balances of Different Types of Accounts with the totals of Credit’s Balances of Accounts. These accounts are placed in an order that is helpful in understanding the totals of accounts in a systematic way and usually, it is according to the Liquidity. This way is called Trial Balance Order of Liquidity.

This order is shown below:

1. Assets Comes First. In assets, those assets which are having high Liquidity comes first which have low liquidity come to the last.

2. Liabilities comes Second in the sequence. Current Liabilities, Short-Term or most Shortest maturities liabilities come first and Long-Term Liabilities comes at the end.

3. Equity or Owner’s Equity Comes in the Third place

4. Then Dividends or Drawings Comes in the Forth Place

5. Revenues Comes in the Fifth Place

6. And finally, Expenses in the last place