Definition
A trial balance is a list of every account in the general ledger with its debit or credit balance at a date, used to prove that total debits equal total credits. The 6-column version shows each account's opening balance, movement during the period and closing balance. It is the starting point for preparing financial statements.
How it works
Preparing one is mechanical: take each account's closing balance from the ledger, put it in the debit or credit column according to its sign, and total both columns. In software it is a report, and the 2, 4 and 6 column layouts are simply different levels of detail (closing only; movement plus closing; opening, movement and closing).
A balanced trial balance proves arithmetic, not correctness. It will not catch an entry posted to the wrong account, a transaction left out, or the same invoice recorded twice. That is why it is reviewed line by line against normal balances and last period's figures before the statements are drafted.
Ledgeriano produces 2, 4 and 6 column trial balances for any date range, with drill-down to ledger lines. Our trial balance template shows the layout if you work in a spreadsheet.
Example: a small trial balance
A service business at 31 December. Debits and credits both total 96,000.
| Account | Debit | Credit |
|---|---|---|
| Bank | 21,000 | |
| Accounts receivable | 9,000 | |
| Equipment | 18,000 | |
| Accounts payable | 4,500 | |
| Share capital | 20,000 | |
| Service revenue | 71,500 | |
| Salaries expense | 38,000 | |
| Rent expense | 10,000 | |
| Total | 96,000 | 96,000 |