In plain English
If total debits do not equal total credits, there is an error to find. A difference divisible by nine often means a transposition.
It feeds the financial statements.
Why it matters
Modern software keeps debits and credits equal automatically, so the trial balance is less about catching math errors and more about seeing every account on one page. It is where you notice an account with a strange sign, an old balance that never moved, or a suspense account that was never cleared.
Many accountants ask for a year-end trial balance as the starting point for preparing the return.
Worked example
Debits total $8,000 (cash $5,000, receivables $2,000, rent $1,000) and credits total $8,000, so the trial balance balances.
How to handle it
- Run the trial balance report as of the last day of the period.
- Scan each line for balances that look unusual, such as negative cash or a positive balance in an account that should be zero.
- Tie key accounts to outside documents: bank and card statements, loan statements and payroll filings.
- Note any adjustments needed, post them, and run the report again.
- Export a final copy for your records or your accountant.
Common mistakes
- Assuming a balanced trial balance means the books are right, when a transaction posted to the wrong account still balances.
- Running it on a different basis from the one your accountant uses, which produces numbers they cannot tie out.
- Ignoring small leftover balances in clearing accounts, which often signal deposits or payments that were never matched.
Not the same as: General ledger
The general ledger shows every transaction in every account. The trial balance shows only the ending balance of each account, as a summary and a check. See General ledger.
Go deeper
- What Is a Trial Balance and How to Use One: Understand the area report, how to read debit and credit columns, what it proves and does not, and how to use it to catch errors.
Related terms
- Undeposited funds: A QuickBooks holding account for payments received but not yet deposited.
- Working capital: Current assets minus current liabilities, a rough measure of short-term cushion.
- Suspense account: A temporary account for transactions you cannot yet classify.
Common questions
What is a trial balance?
A list of all account balances at a date, used to check that debits equal credits.
Can you give an example of trial balance?
Debits total $8,000 (cash $5,000, receivables $2,000, rent $1,000) and credits total $8,000, so the trial balance balances.
Can a trial balance be in balance and still be wrong?
Yes. If a transaction is posted to the wrong account, or left out entirely, debits and credits still match. That is why reconciliations and reviews still matter.
What is an adjusted trial balance?
It is the trial balance after period-end adjustments, such as accruals and depreciation, have been posted. The financial statements are usually prepared from it.
General information, not tax, legal or accounting advice. Confirm rules with the IRS, the NJ Division of Taxation or a licensed professional.