What is a Trial
Balance?
Trial Balance is a list of closing balances of ledger accounts on a
certain date and is the first step towards the preparation of financial statements.
It is usually prepared at the end of an accounting period to assist in the
drafting of financial statements. Ledger balances are segregated into debit
balances and credit balances. Asset and expense accounts appear on the debit
side of the trial balance whereas liabilities, capital and income accounts
appear on the credit side. If all accounting entries are recorded correctly and
all the ledger balances are accurately extracted, the total of all debit
balances appearing in the trial balance must equal to the sum of all credit
balances.
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