Refer to figure.
The turn indicator or 'turn and slip' indicator is a gyroscopic instrument designed to indicate an aircrafts rate and direction of turn, the turn co-ordinator work in a similar way. Both instruments usually incorporate a balance indicator to enable pilots to fly balanced turns.The balance or slip indicator comprises a curved, liquid filled, tube that contains a ball which moves in a similar way to a pendulum. It gives an indication of the state of balance of an aircraft in a turn or straight and level flight.

In level flight gravity will keep the ball in the middle, when turning centrifugal force proportional to the TAS and rate of turn also acts on the ball. If the lift is equal to the resultant of the aircraft weight and centrifugal force then the turn is balanced and the ball will stay central. A properly balanced turn is where the angle of bank is correct for the TAS and rate of turn, too much bank causes the aircraft to slip into the turn and too little bank causes the aircraft to skid, when a turn is balanced the ball will be in the middle.

 Slip - If the ball is off centre in the same direction as the turn, the aircraft is slipping. Increasing rudder deflection in the direction of the turn (step on the ball) or reducing the bank angle will bring the ball back to the middle.

Skid - If the ball is off centre in the opposite direction to the turn, the aircraft is skidding. Increasing rudder deflection in the opposite direction to the turn(step on the ball) or increasing the bank angle will bring the ball back to the middle.

Note: Phrases to help you remember the difference between slip and skid are: 'SLIP IN' and 'SKID OUT'
If the ball's on the INside of the turn you're SLIPping ( Slip In), if it's on the OUTside of a turn you're SKIDing (Skid Out)!

slipping turn →  INCORRECT.  The aircraft is turning right, the ball is to the left so on the outside of the turn, this indicates a skidding turn.

skidding turn  → CORRECT.   The aircraft is turning right, the ball is to the left so on the outside of the turn, this indicates a skidding turn.

balanced turn → INCORRECT.  The ball would be in the centre if the turn was balanced.