What Is a Trial Balance Accounting Term?

Preparing a trial balance is a necessary step in double-entry accounting. It is used to ensure all accounts are in balance with the basic accounting equation of Assets = Liability + Equity.

Information

A trial balance includes information for each asset, liability and equity account along with the credit or debit balance for each account.

Time Frame

A trial balance is a snapshot of a business at a given time. A trial balance is prepared at the end of an accounting period, usually at the end of each month, quarter and year.

Totals

When the trial balance is complete, the total of all amounts in the debit column will equal the total amount in the credit column.

Expert Insight

Accounts in a trial balance are generally listed in order of account number.

Misconceptions

A trial balance is not a financial statement. It is simply a tool used to ensure all accounts are in balance before the final financial statements are created.

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