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.
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Information
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A trial balance includes information for each asset, liability and equity account along with the credit or debit balance for each account.
Time Frame
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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.
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Totals
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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
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Accounts in a trial balance are generally listed in order of account number.
Misconceptions
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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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References
- Fundamental Accounting Principles; John J. Wild, Kermit D. Larson and Barbara Chiappetta, 2007
