The totals on the balance sheet will not equal the totals on the post-closing trial balance due to contra accounts. We will use  the contra account Accumulated Depreciation to illustrate why this occurs.

The account Accumulated Depreciation will have a credit balance and it will be listed in the credit column of the trial balance. Its credit balance will be included with the other credit balances, most of which are liability accounts and owner or stockholder equity accounts.

On the balance sheet, the credit balance in Accumulated Depreciation will not be reported with the other credit balances. Rather, the credit balance in Accumulated Depreciation will be a deduction from the debit balances reported in the asset section entitled property, plant and equipment.

About the Author: Harold Averkamp (CPA) has worked as an accountant, consultant, and university accounting instructor for more than 25 years.

He is the creator of the AccountingCoach Pro which has been praised for its ability to simplify accounting in a way that anybody can understand.

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