What is a trial balance?
Divided into credits and debits, a trial balance is a bookkeeping table detailing the total ledgers in a business. If you have not made a bookkeeping error the trial balance should be mathematically equal in both the credit and debit columns. If both columns are equal, then the trial balance is balanced.
Purpose of a trial balance
A trial balance is usually completed as an internal document to keep track of finances and your accounting and bookkeeping are accurate.
Trial balance vs. balance sheet
Although similar, the difference between a trial balance and a balance sheet comes down to scope and purpose.
A trial balance is less formal and usually just includes the closing balances of a business’ accounts. Whereas a balance sheet is a formal document, often intended to be released more broadly and will include more detail such as assets, liabilities, and equity.
This glossary is intended for small business owners and contains definitions suited to their needs. For more comprehensive explanations, we recommend consulting an accounting or bookkeeping professional. Reckon does not offer accounting, tax, business, or legal advice.
Try Reckon One now for free!
30 days free trial. Cancel anytime.