Accounting

Trial Balance

Definition

A trial balance is an internal accounting report listing every account's ending balance, used to confirm that total debits equal total credits before financial statements are finalized for a period.

Because every transaction in double-entry bookkeeping affects at least two accounts, one debit and one matching credit, the sum of all debit balances should always equal the sum of all credit balances if the books are correct. A trial balance that doesn't balance signals a real entry error somewhere that needs to be found before the books can be closed.

It's a working document, not something a founder typically reviews directly, but it's the checkpoint a bookkeeper or accountant runs before producing the income statement and balance sheet a founder actually sees. A monthly close that skips this check is more likely to hand over financials with an error buried somewhere inside them.

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