Accounting Resource
What Is a Trial Balance?
A trial balance lists all account balances and confirms total debits equal total credits.
Purpose
Checks arithmetic accuracy of postings.
Acts as a checkpoint before preparing financial statements.
Typical Issues
Missing entries.
Wrong account mapping.
Duplicate or reversed postings.
Step-by-Step Guidance
- Generate trial balance for the period.
- Verify debit and credit totals are equal.
- Investigate abnormal balances.
- Post adjusting entries if needed.
Small-Business Use Case
A services company identified an expense account with a credit balance, found a reversal posted incorrectly, and corrected the month-end close.
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FAQ
If trial balance matches, are statements always correct?
Not always. Classification and timing mistakes can still exist.