Trial Balance

The trial balance is a worksheet on which you list all your general ledger accounts and their debit or credit balance. It is a tool that is used to alert you to errors in your books. The total debits must equal the total credits. If they don't equal, you know you have an error that must be tracked down.

When closing out your books at the end of an accounting period, you will prepare three trial balances:

  1. A preliminary trial balance is prepared using your general ledger account balances before you make adjusting entries.
  2. An adjusted trial balance is done after preparing adjusting entries and posting them to your general ledger. This will help ensure that the books used to prepare your financial statements are in balance.
  3. A post-closing trial balance is done after preparing and posting your closing entries. This trial balance, which should contain only balance sheet accounts, will help guarantee that your books are in balance for the beginning of the new accounting period.


You are getting ready to close the books for the year ended December 31, 2002. You post totals from the journals to the general ledger, and foot the general ledger accounts. Then you prepare the following preliminary trial balance, using the balances from your general ledger accounts.

Beta Service Company
Preliminary Trial Balance
December 31, 2002


Debit Credit
Cash in bank 3,423
Accounts receivable 11,400
Equipment 42,900
Accumulated depr. equip.
Buildings 119,000
Accumulated depr. build.
Land 80,000
Accounts payable
Payroll taxes payable
Mortgage payable
Drawing account 24,000
Advertising 18,900
Depreciation 16,760
Insurance 4,500
Interest expense 12,421
Payroll taxes 16,233
Property taxes 4,989
Repairs and maintenance 23,430
Utilities 3,856
Wages 198,515

580,327 580,327

Business Tools

A trial balance spreadsheet can be found in the Business Tools area. It is an Excel 4.0 spreadsheet template, so you can use the template as a starting point for your own trial balance.

What if your trial balance does not balance? In other words, what if total debits don't equal total credits? This shouldn't surprise or discourage you. In fact, it might be more surprising if it does balance. Accounting errors happen. Even experienced bookkeepers normally have to find trial balance errors.