Quick answer
A trial balance is an internal checkpoint that lists each ledger account’s ending balance in a debit or credit column. Equal column totals show that the recorded debits and credits are arithmetically in balance; they do not prove that every accounting decision is correct.
The trial balance connects account-level records to period-end review. It is prepared from the ledger—not by adding journal entries again—and includes each account balance once. A journal can affect the same account many times; the ledger combines those lines into one ending balance for the trial balance.
A trial balance includes revenue and expense accounts as well as assets, liabilities, and equity. Its column totals therefore are not balance-sheet totals. It also keeps a contra-asset such as accumulated depreciation separate from the asset it reduces.
Trial balance preparation
- List the accounts that have balances in the general ledger.
- Bring each ending balance across once, keeping its debit or credit side.
- Add the debit column and the credit column separately.
- If the totals differ, investigate before continuing.
- If they agree, still review whether each item belongs in the records (recognition), is in the right account or category (classification), is in the right period (timing), and whether anything is missing (completeness).
Prepare Maple Tech’s unadjusted trial balance
Maple Tech’s March ledger contains cash, equipment, supplies, a supplier payable, common shares, service revenue, and rent expense. These balances are unadjusted: they include routine transactions but not the period-end updates for additional services earned, supplies used, and equipment cost allocated to March.
Scroll horizontally to see all columns.
| Account | Debit | Credit |
|---|---|---|
| Cash | 42,500 | |
| Supplies | 2,400 | |
| Equipment | 12,000 | |
| Accounts Payable | 2,400 | |
| Common Shares | 50,000 | |
| Service Revenue | 6,000 | |
| Rent Expense | 1,500 | |
| Total | 58,400 | 58,400 |
Both columns total $58,400. The matching totals show arithmetic balance, but they do not prove that every journal line was posted correctly or that the records are complete and ready for financial statements.
Why $58,400 is not an asset or balance-sheet total
A trial balance’s debit and credit totals are not total assets and total claims. Before closing, revenue and expense accounts appear separately alongside balance-sheet accounts:
- Debits are $56,900 of assets plus $1,500 of Rent Expense, for $58,400.
- Credits are $2,400 of liabilities, $50,000 of Common Shares, and $6,000 of Service Revenue, for $58,400.
At this unadjusted checkpoint, recorded revenue exceeds recorded expense by $4,500, but that is not yet final March profit. Adjustments for services earned, supplies consumed, and equipment use are still needed before these balances can support the March financial statements.
Unadjusted, adjusted, and post-closing trial balances
- Unadjusted trial balance
- Prepared after routine posting and before period-end adjustments. It is the starting point shown in the worked example above.
- Adjusted trial balance
- Prepared after identified adjusting entries are journalized and posted. Its balances support financial-statement preparation.
- Post-closing trial balance
- Prepared after temporary revenue, expense, and distribution accounts are closed. It contains the permanent accounts carried into the next period.
Limits of trial balance equality
Can signal
- Only one side of an entry was posted.
- A debit was carried to the credit column or vice versa.
- An amount or column total was added incorrectly.
Cannot reliably reveal
- A complete, balanced entry was omitted or recorded twice.
- The right amount was posted to the wrong account or period.
- A recognition or measurement decision was wrong.
When the totals differ, re-add the columns first. Then use the size of the difference as a clue: a balance listed in the wrong column creates a difference of twice that balance, and a transposition such as $540 entered as $450 creates a difference evenly divisible by 9.
Period-end review after the trial balance
After preparing the unadjusted trial balance, the business reviews the accounts for missing accruals, outdated balances, allocations, estimates, and other needed period-end adjustments. The Adjusting Entries article shows an adjusted trial balance, while Financial Statement Relationships explains how those balances become reports.