At a Glance
A Trial Balance is an accounting report showing account balances for assets, liabilities, income, costs, and capital at a given time.
It is called a trial balance because it normally contains an equal amount of credit and debit balances on each side.
A Simple Example
What a Trial Balance says about your business
A trial balance will show you balances for each of your business accounts. It offers an easier way of viewing your business accounts balances without having to scrutinize each individually.
Additionally, a trial balance helps bookkeepers and accountants to prepare the final accounts (income statement and balance sheet). The amounts captured on an income statement and balance sheet come from a trial balance.
In closing, a trial balance is crucial accounting report that lays the foundation for key decisions as well as the preparation of financial statements.