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.
How to prepare a trial balance
- 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 recognition, classification, timing, and completeness.
Maple Tech’s unadjusted trial balance
These balances come from Maple Tech’s five March journal entries and ledger postings. They are unadjusted because the $1,000 of accrued service revenue, $1,500 of supplies used, and $200 of depreciation have not yet been recorded. Taxes and other unstated items are outside the example.
| 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. Period-end adjustments then recognize $1,000 of accrued revenue, $1,500 of Supplies Expense, and $200 of Depreciation Expense. After those adjustments, March profit is $3,800. Only the adjusted balances support Maple Tech’s March statements.
Three checkpoints with different timing
- Unadjusted trial balance
- Prepared after routine posting and before period-end adjustments. It is the starting point shown in the Maple Tech exhibit.
- 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.
What equal totals can—and cannot—detect
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.
Balanced does not mean correct
If a $12,000 equipment purchase were debited to Supplies instead of Equipment while Cash was still credited, the trial balance would remain equal. Account review and supporting evidence are still needed.
From checkpoint to reporting
After preparing the unadjusted trial balance, the business reviews the accounts for missing accruals, outdated balances, allocations, estimates, and other needed period-end adjustments. Continue to Adjusting Entries for Maple Tech’s adjusted trial balance, then How the Financial Statements Connect to see how those balances become reports.