Trial Balance
An essential bookkeeping worksheet, acting as a checkpoint in the accounting process to verify the balance of debits and credits across all accounts in an organization's ledger.
Compiled typically at the close of a reporting period, the trial balance aggregates the balances of all general ledger accounts. Each account, from cash to revenue to expenses, is listed alongside its current balance, ensuring that the total debits match the total credits. This check is fundamental to the double-entry bookkeeping system, which operates on the principle that for every financial transaction, values must be balanced between the debiting and crediting accounts.
A well-balanced trial balance signifies mathematical accuracy in the bookkeeping entries, although it does not guarantee the absence of errors. Nevertheless, it serves as a foundational tool for accountants to begin preparing financial statements, enabling further analysis and adjustments where necessary to reflect accurate financial positions.
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