Money Matters

What is a trial balance?

Learn what a trial balance is, what it shows, and how it helps confirm that total debits and credits in the general ledger match for a reporting period.

Published August 17, 20269 min read Share

This article was originally published on February 11, 2025, but has been refreshed and re-published with new content on August 17, 2026.

A trial balance is an internal accounting report that lists general ledger account balances in separate debit and credit columns to check whether total debit balances equal total credit balances.

At the end of an accounting period, transactions have been posted, reporting deadlines are approaching, and the financial statements still need to be prepared. Before they are finalized, the trial balance helps uncover unbalanced entries, posting mistakes, or calculation errors.

Matching totals are a reassuring checkpoint, but they are not the end of the review. A balanced trial balance confirms that the ledger is mathematically aligned with double-entry accounting, but it does not prove that every transaction was recorded or classified correctly.

Unlike a balance sheet or income statement, a trial balance isn’t a financial statement. It’s a working report used to review account balances and support financial reporting and audit preparation.

Key takeaways

• A trial balance lists the ending balances of general ledger accounts in separate debit and credit columns to confirm that the totals match.
• Businesses commonly prepare trial balances at key stages of the accounting cycle, including before financial statements are produced and after closing entries are posted.
• The three main types are the unadjusted, adjusted, and post-closing trial balance, each used at a different stage of the accounting cycle.
• A trial balance can reveal mathematical errors and posting errors that cause debit and credit totals not to match, but it cannot detect every bookkeeping mistake.
• Accounting software can automate trial balance reporting, reduce manual work, and make discrepancies easier to identify.

Here’s what we’ll cover

What is the difference between a trial balance and a balance sheet?

A trial balance and a balance sheet serve different purposes. A trial balance is an internal accounting report used to check that the total debit balances equal the total credit balances, while a balance sheet is a financial statement that shows a business’s assets, liabilities, and equity at a specific point in time.

Comparison	Trial balance	Balance sheet
Purpose	Checks whether the total debit balances equal the total credit balances in a general ledger.	Shows the financial position of a business.
Contents	Lists general ledger accounts with balances, including asset, liability, equity, revenue, and expense accounts.	Summarizes assets, liabilities, and equity.
Accounting status	Internal working report.	Formal financial statement.
Main users	Accountants, bookkeepers, and finance teams.	Business owners, lenders, investors, and other stakeholders.
When it is prepared	At different stages of the accounting cycle, including before financial statements are prepared and after closing entries.	At the end of a reporting period.
What it shows	Whether recorded debit and credit totals match.	The business’s assets, liabilities, and equity at a specific point in time.

An adjusted trial balance provides the account balances used to prepare the balance sheet and other financial statements. For a business with subsidiaries, finalized account balances may also feed into a consolidated balance sheet, which presents the financial position of the group as a single economic entity.

However, equal debit and credit totals only show that the ledger is mathematically balanced; they do not prove that every transaction is complete, accurate, or correctly classified.

What does a trial balance show?

A trial balance shows the ending balance of each general ledger account in the report as of a specific date. Each account normally appears once, with its balance entered in either the debit or credit column.

A typical trial balance includes:

• Account names: the general ledger accounts included in the trial balance, such as cash, accounts receivable, revenue, and expenses.
• Debit balances: accounts that normally carry debit balances, including assets and expenses.
• Credit balances: accounts that normally carry credit balances, including liabilities, equity, and revenue.

The total of the debit column should equal the total of the credit column. If the totals do not match, you’ll need to review the ledger for posting, transcription, or calculation errors.

How do you prepare a trial balance?

To prepare a trial balance, take the ending balance of each general ledger account, enter it in the appropriate debit or credit column, and then compare the column totals.

1. Confirm that the period’s transactions have been recorded in the journal and posted to the general ledger.
2. Calculate the ending balance of each general ledger account.
3. List each account included in the report—usually those with a nonzero balance—in the same order as the chart of accounts.
4. Enter each balance in the appropriate debit or credit column.
5. Add the two columns and confirm that the totals match.
6. If the totals don’t match, trace the difference to a posting, transcription, or calculation error.

Because each double-entry transaction affects at least two accounts, understanding how debits and credits work can make it easier to trace an imbalance back to the original entry.

Once the unadjusted trial balance is balanced, record and post any required adjusting entries. You can then prepare an adjusted trial balance for use in producing the financial statements.

Trial balance example

The trial balance example below shows what a trial balance looks like and how general ledger account balances are separated into debit and credit columns:

Example business

Unadjusted trial balance

As of December 31, 20XX

Account name	Debit ($)	Credit ($)
Cash	10,000
Accounts receivable	5,000
Office supplies	1,500
Accounts payable		3,000
Loan payable		5,500
Sales revenue		12,000
Rent expense	3,000
Utilities expense	1,000
Totals	20,500	20,500

In this example, total debits and total credits both equal $20,500, so the trial balance is mathematically balanced.

Assets and expenses normally have debit balances, while liabilities, equity, and revenue normally have credit balances. For example, accounts payable appears in the credit column because it is a liability rather than an asset.

If the column totals didn’t match, you would need to investigate the difference before using the trial balance to prepare the financial statements.

What are the three types of trial balance?

The three main types of trial balance are the unadjusted, adjusted, and post-closing trial balance.

Each uses the same basic debit-and-credit format but is prepared at a different stage of the accounting cycle.

Unadjusted trial balance

An unadjusted trial balance is prepared after transactions have been recorded and posted to the general ledger but before period-end adjusting entries are made.

It provides an initial check that total debit balances equal total credit balances and gives finance teams a starting point for reviewing accounts and determining which adjustments may be needed.

Adjusted trial balance

An adjusted trial balance is prepared after adjusting entries have been recorded and posted. These entries may account for accruals, deferrals, depreciation, and other period-end updates.

The adjusted balances are used to prepare financial statements, including the income statement and balance sheet.

Post-closing trial balance

A post-closing trial balance is prepared after temporary accounts, such as revenue and expense accounts, as well as dividend or owner withdrawal accounts, have been closed.

It contains only permanent accounts, including assets, liabilities, and equity, and confirms that the ledger remains balanced before the next accounting period begins.

What is a trial balance used for, and what are its limitations?

A trial balance is used to review general ledger balances, check whether total debit balances equal total credit balances, and provide a basis for preparing financial statements after any necessary adjustments.

However, balanced totals only show that the debit and credit columns are mathematically equal. They do not prove that every transaction has been recorded completely, accurately, or in the correct account.

Area	Benefit	Limitation
Error checking	Identifies situations where total debit and credit balances do not match.	Can’t detect every error, including omitted transactions, duplicate entries, incorrect classifications, or equal offsetting errors.
Financial reporting	An adjusted trial balance provides the account balances used to prepare financial statements.	Isn’t a financial statement and does not show profitability, cash flow, or overall financial health.
Ledger review	Organizes account names and balances in a format that is easy for finance teams to review.	Manual preparation can be time-consuming and may introduce additional errors.
Audit preparation	Provides an organized summary of ledger balances that can support reconciliation and audit preparation.	Shows account balances rather than the complete transaction history or supporting documentation.

How can accounting software simplify trial balance reporting?

Accounting software can generate a trial balance report automatically from the balances recorded in your general ledger. This reduces manual calculations and makes it easier to review debit and credit totals at any point in the reporting period.

Up-to-date account balances can help finance teams identify discrepancies, record adjustments, reconcile accounts, and prepare financial statements more efficiently.

The trial balance can also support balance sheet reconciliation by giving finance teams a structured starting point for comparing ledger balances with subledgers and other supporting records. However, software does not eliminate the need to review transactions for omissions, incorrect classifications, or other errors that may not affect whether the totals balance.

Financial reporting software can also help finance teams rerun the trial balance after adjustments and investigate unusual account balances without rebuilding the report manually.

Frequently asked questions about a trial balance

How often should a business prepare a trial balance?

Businesses commonly prepare a trial balance during monthly, quarterly, and year-end closes, depending on their reporting cycle. Finance teams may also generate one whenever they need to review general ledger balances or investigate a discrepancy.

What should you check if a trial balance does not balance?

First, recalculate the debit and credit totals and compare each account balance with the general ledger. Then, check for balances entered in the wrong column, incorrectly copied amounts, transposed digits, and mistakes when posting journal entries to the ledger. If the difference remains, trace the affected entries back through the journal and general ledger.

What is the difference between a general ledger and a trial balance report?

A general ledger records the transactions and running balance for each account. A trial balance report summarizes the ending balances from those accounts and places each one in either the debit or credit column, without showing the underlying transaction detail.

Do zero-balance accounts appear on a trial balance?

Trial balance reports often exclude accounts with zero balances, but many accounting systems allow them to be included. The exact presentation depends on the report settings.

Can a trial balance still balance before bank accounts are reconciled?

Yes. A trial balance may balance even when the cash balance in the general ledger is incomplete or incorrect because the recorded entries may still contain equal debit and credit amounts. A bank reconciliation separately compares the company’s cash records with the bank statement and identifies items such as service charges, interest, outstanding checks, deposits in transit, and recording errors.