Understand the Purpose of a Trial Balance

The trial balance is a list of all accounts in the chart of accounts, along with their balances.

It is prepared to verify the accuracy of the accounting information.

The trial balance therefore includes a list of accounts in the order they appear in the chart of accounts, along with the balances of these accounts, which are divided into two columns:

• one for accounts with a debit balance and
• the other for those with a credit balance.

The Purpose of the Trial Balance

A trial balance is prepared to verify the accuracy of the amounts recorded in the chart of accounts.

It is, however, very useful because, in addition to proving the arithmetic accuracy of the chart of accounts, it contains all the information required to prepare financial statements.

Important

In a trial balance, debits and credits must balance.