A report listing the closing balances of all general ledger accounts at a specific date, used to verify that total debits equal total credits.
The trial balance is a critical step in the accounting cycle, prepared after all journal entries are posted to the general ledger. If total debits don't equal total credits, there's an error that must be found and corrected before financial statements can be prepared. Note: a balanced trial balance doesn't guarantee accuracy — errors like recording to the wrong account won't be caught.
A trial balance might show: Cash (Debit) ₹5,00,000 + Equipment (Debit) ₹10,00,000 = ₹15,00,000. Accounts Payable (Credit) ₹3,00,000 + Capital (Credit) ₹12,00,000 = ₹15,00,000. Both sides balance.
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Common causes include: single-sided entries, wrong amounts posted, math errors, missing entries, or posting to wrong debit/credit side. You must find and correct the error.
No. It's an internal verification tool used to check arithmetic accuracy before preparing formal financial statements (P&L, Balance Sheet, Cash Flow Statement).
The master accounting record that contains all financial transactions of a business, organized by account.
A record of a financial transaction in the accounting system, showing the accounts affected, amounts debited and credited, date, and description.
A financial statement that shows a company's assets, liabilities, and equity at a specific point in time.
An accounting system where every transaction is recorded in at least two accounts — a debit in one and a credit in another — ensuring the accounting equation always balances.
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