What is Trial Balance

 

What is Trial Balance 

In the words of J.R Batliboi, "A trial balance is a statement, prepared with the debit and credit balances of the ledger accounts to test the arithmetical accuracy of the books."

A trial balance gets prepared just before preparing final accounts, which includes a balance sheet, Profit and loss statement, Cash flow, and notes to Accounts. In layman's terms, we can assume that it is the basic structure behind preparing the final accounts. It is the third step in the road map to prepare final accounts after the entries are passed in journal-register followed by classification and grouping of transactions to their respective ledgers. These ledgers, i.e. the principal book containing all sets of accounts, are then accumulated in a single place to constitute a Trial balance.

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