After the Recording Process has been completed for all of the transactions in a period, the
trial balance is ready to be prepared.
The Trial Balance is a list of all of the accounts from the Ledger, in the same order
as the ledger, with each account’s respective balance as of the reporting date.
Each account will have either a debit or a credit balance.
As seen here, the trial balance has three columns.
The first column is for the account titles. The next two columns are where the account’s
balance are shown. The accounts that have a debit balance will
show their balance in the debit column, and the accounts that have a credit balance
will show their balance in the credit column.
In this example, the sum of all of the debit balances equal the sum of all of the credit
The primary purpose of the trial balance is to provide a way to check if the total of
all of the debit column equals the total of all of the credit column.
At all times, the total of the debit and the credit columns should equal each other.
If the sum of these two columns do not balance, then there has been an error in the recording
Another purpose of the Trial Balance is to provide a simple summary of all of the account
totals to be used for creating the financial statements.
The trial balance is an integral part of The Accounting Cycle.
After the Trial Balance has been completed, the Accounting Cycle for a given Accounting