Question

State the meaning of a trial balance?

Answer 1

Trial balance is a statement prepared to check the arithmetical accuracy of transactions recorded in the journal, posted into the ledger and balanced in the ledger accounts.

The balance of ledger accounts shows the difference between the total of the debit items and credit items in an account.

Personal, real and nominal accounts are considered for preparing the trial balance. Generally, it is prepared at the end of an accounting year.

However, it may be prepared at the end of any chosen period, which may be monthly, quarterly, half yearly or annually depending upon when it is required. It helps in the preparation of the financial statements.