Trial Balance
A list of all general ledger account balances at a point in time, used to verify that total debits equal total credits before preparing financial statements.
What is Trial Balance?
A trial balance is a bookkeeping worksheet that lists all accounts in the general ledger with their debit or credit balances at a specific point in time. Its primary purpose is to verify that the double-entry accounting system is in balance — total debits must equal total credits. An out-of-balance trial balance signals a recording error. The trial balance is an intermediate step in the accounting cycle between posting journal entries and preparing the financial statements. It exists in two forms: the unadjusted trial balance (before adjusting entries are recorded) and the adjusted trial balance (after adjusting entries for accruals, deferrals, and corrections). From the adjusted trial balance, accountants prepare the formal income statement, balance sheet, and cash flow statement.
Example
At quarter-end, a controller prepares an adjusted trial balance showing all 200+ accounts in the general ledger: Cash $5M (debit), Accounts Receivable $12M (debit), Accounts Payable $4M (credit), Revenue $30M (credit), and so on — confirming that total debits equal total credits before closing the books and filing the 10-Q.
Source: Investopedia — Trial Balance