What it looks like
Accounts are listed from assets through equity, income and expenses. Each shows its balance on its normal side. At the bottom the totals appear. In a healthy set of books, they match.
Run it as of a date, usually month end or year end. Compare to a prior date to see which accounts moved.
What it proves
If debits equal credits, the arithmetic of your entries is consistent. That is the extent of the proof. Modern software enforces balanced entries, so the trial balance nearly always balances. If it does not, there is a data problem, such as a corrupted import or a conversion error.
It does not prove that each amount is in the correct account or that every transaction is recorded.
Reading it for problems
Scan each account against what you expect. Bank balances should match statements. Receivables and payables should match their detail reports. Look for accounts on the wrong side, such as a negative bank balance or an expense with a credit balance. Check for accounts with names that you do not recognize.
Check liabilities for payroll taxes, sales tax and loans against filings and statements.
Adjusted and post-closing versions
An unadjusted trial balance is run before adjusting entries. After depreciation, accruals and other adjustments, you have an adjusted trial balance, which feeds the profit and loss and the balance sheet. Accountants may also prepare a post-closing version, which includes only balance sheet accounts after the year's profit is rolled into equity.
Comparing the unadjusted and adjusted versions shows the impact of your period-end entries.
Practical uses
Give your tax preparer an end-of-year trial balance. It lets them see the whole picture on one page and ask targeted questions. Use it before applying for a loan to confirm that the data lenders will see is clean.
If you are learning accounting, build one by hand from a handful of sample entries. Seeing how balances roll up helps all the other reports make sense.
A quick monthly routine
After you reconcile, run the trial balance and take two minutes to compare it with last month. Highlight any account that changed by a large amount and write a one-line reason. Check that accounts like uncategorized income, ask my accountant and opening balance equity are empty or explained. This habit turns a technical report into a simple control and gives your bookkeeper or CPA a trail of notes to follow.
Save a copy of the year-end version as a PDF or spreadsheet. If a question comes up later about what the books said on that date, the saved report answers it even if later edits have changed live reports.
Common questions
Is a trial balance a financial statement?
No. It is a working report. The financial statements are built from it.
Why might it be out of balance?
Usually due to imports, system errors or incomplete conversions. Entries made normally are balanced.
Do I need one?
Not for daily work, but it is useful at close and for your accountant.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.