A trial balance is a report listing the ending balance of every account in the general ledger, used to check that total debits equal total credits before preparing statements.
At the end of a period, the balance of every ledger account is listed in a trial balance with debits in one column and credits in another. Because of double-entry, the two columns should be equal. If they are not, an error has been made in recording or posting, so the trial balance is a first-line accuracy check.
A balanced trial balance is the starting point for producing the financial statements: the account balances are grouped and mapped into the balance sheet and income statement. Note that a trial balance can balance yet still hide errors, such as a transaction posted to the wrong account.
Before year-end statements are prepared, the accountant runs a trial balance. Total debits of $250,000 equal total credits of $250,000, confirming the ledger is internally balanced and ready to roll into the financial statements.
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