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Trial Balance

Trial Balance (Definition)​

A trial balance is a bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit columns.

Key aspects of trial balance include:

  1. Prepared at the end of an accounting period
  2. Lists all accounts in the general ledger with their respective debit or credit balances
  3. Used to ensure that the total of all debit balances equals the total of all credit balances
  4. Helps in detecting mathematical errors in the bookkeeping system
  5. Serves as a basis for preparing financial statements
  6. Does not guarantee that there are no errors in individual accounts
  7. Understanding the trial balance is crucial for maintaining accurate financial records

The trial balance is an important step in the accounting cycle, helping to ensure the accuracy of financial records before preparing financial statements.