What Is a Trial Balance?
Definition, a worked example, and what it can and cannot prove.
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| Purpose | Check that total debits equal total credits |
|---|---|
| Prepared from | The ledger |
| Topic | Financial accounting · Bookkeeping |
Trial balance in plain English
After you post transactions to the ledger, you add up each account and list the balances. Because every transaction has equal debits and credits, the two columns must match. The trial balance is a quick check before you prepare the financial statements.
Worked example
| Account | Debit | Credit |
|---|---|---|
| Cash | 5,000 | |
| Equipment | 4,000 | |
| Bank loan | 3,000 | |
| Capital | 6,000 | |
| Total | 9,000 | 9,000 |
Both columns total 9,000, so the trial balance agrees.
- Assuming a balanced trial balance means there are no errors. It will not reveal an omitted transaction, a wrong account, or errors that cancel each other out.
- Putting a balance in the wrong column.
Frequently asked questions
What if a trial balance does not balance?
Recheck the addition, look for a balance in the wrong column or a one-sided entry, and, if the difference cannot be found yet, hold it in a suspense account.
Is a trial balance the same as a balance sheet?
No. A trial balance lists all ledger balances to test the arithmetic. A balance sheet is a financial statement showing assets, liabilities and equity.
Which errors does a trial balance not detect?
Errors of omission, commission, principle, compensating errors and errors of original entry.
Keep learning
This page is for general learning. Accounting rules vary by country and standard.