Trial Balance
Definition
A trial balance is a list of all accounts and their balances at a point in time. Total debits should equal total credits. If they do not, there is an error in the entries.
Example
After posting all journal entries for the month, the bookkeeper runs a trial balance. Total debits are $50,000 and total credits are $50,000. The books are in balance.
Why It Matters
The trial balance is a check that the books are balanced before producing financial statements. If it does not balance, the error must be found first.