Trial balance
In one sentenceA list of the balances of all ledger accounts on a given date, used to confirm that total debit balances equal total credit balances before preparing the financial statements.
Simply put
The trial balance gathers each account's balance in one table: a debit column and a credit column. If the two totals are equal, the posting is arithmetically sound.
But balance does not mean the books are free of errors: an entry recorded in the wrong account, or forgotten entirely, does not upset the balance. The income statement and the statement of financial position are prepared from the trial balance.
Worked example
A summarized trial balance of a trading business at 31 December.
Total debit balances (assets and expenses)950,000 SAR
Total credit balances (liabilities, equity and revenue)950,000 SAR
Difference (950,000 − 950,000): the trial balance is balanced0 SAR
Don't confuse it with
Statement of financial positionAn organized statement of assets, liabilities and equity prepared from the trial balance; it does not include revenue and expenses.
in FullScreen ERP
The final statements in the system include the trial balance, the income statement and the statement of financial position. General accounts