Q:

What is the purpose of a trial balance?

A:

Quick Answer

The trial balance is a working document used by accountants as the basis to prepare financial statements. The purpose is to ensure that for every debit listed there is a corresponding credit recorded, shares Accounting-Simplified. If the totals do not balance, an investigation may be made.

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What is the purpose of a trial balance?
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Full Answer

Ledger balances are segregated into debit balances and credit balances. The debit side of the trial balance includes asset and expense accounts, while the credit side includes liabilities, capital and income accounts. If all accounting entries are made correctly and all the ledger extractions are done correctly, the total debit balances recorded on the trial balance must equal the sum of all the credit balances.

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