Trial balance
Financial Accounting glossary · The Accounting Cycle & Financial Statements
Definition
List of all accounts with their debit or credit balances, prepared to verify equality of debits and credits.
Trial balance in plain English
Every business transaction is recorded twice — once as a "debit" and once as a "credit" — and the golden rule is that total debits must always equal total credits. A trial balance is simply a checklist that gathers up every account (cash, sales, rent, etc.) with its ending balance and adds the debit column and credit column separately to make sure the two totals match. Think of it like balancing your two hands: if you put the exact same weight in each, they should hang level — if the trial balance doesn't level out, you know a recording mistake slipped in somewhere. (Note: it catches math imbalances, not every error — a transaction booked to the wrong account can still balance.)
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