top of page

Definition

Trial Balance


A trial balance is an internal accounting report that lists all the general ledger account balances of a business at a specific point in time. Its primary purpose is to ensure that the debits equal the credits, following the principles of double-entry bookkeeping. In every transaction, the total debits must match the total credits to keep the books balanced.


The trial balance typically includes:

  • The account name (e.g., Cash, Accounts Payable, Revenue)

  • The debit or credit balance for each account

  • Totals for both debit and credit columns, which must be equal

For example, if a business purchases equipment by paying cash, one account (Equipment) is debited and another (Cash) is credited. These changes will be reflected in the trial balance.


While the trial balance confirms mathematical accuracy, it does not detect all types of errors. Mistakes such as omitted entries, incorrect amounts in the correct accounts, or double postings will not show up if debits and credits still balance.


The trial balance is usually prepared at the end of an accounting period and serves as the foundation for preparing adjusting entries and financial statements.


In summary, the trial balance is a vital tool in the accounting process, helping ensure accuracy and integrity in financial reporting.

See also

GET IN TOUCH

Connect with us! Fill out the details below and we'll get in touch with you. We are here to point you in the right direction and help you succeed.

Thank you! We will contact you shortly.

DATABOOKS ACCOUNTING

Calgary (587) 880-2847
Toronto (647) 424-4469
Vancouver (604) 343-4634


EMAIL: hello@databooks.ca

  • Facebook
  • Instagram
  • LinkedIn

Follow us on Instagram

2025 © Databooks Accounting. All rights reserved

bottom of page