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A trial balance is a worksheet listing the debit or credit balances of all the ledger accounts for an entity.  Under accounting theory, the total of all the debits must equal the total of all the credits.  Since the trial balance is a list of all the accounts, it serves as an accuracy check.  Preparing a trial balance is the first step for closing the books at the end of an accounting period. 

At period end, the trial balance serves as a reasonableness test for the accountant.  Based on his or her familiarity with the business, the accountant can often spot errors by noticing incorrect account balances. 

For instance, while reviewing the trial balance, an accountant notices that the depreciation expense balance is the same as it was the prior month. This would indicate that the current monthly depreciation expense was not recorded, and so needs to be done before the books can be closed for the month. The trial balance is also used by auditors to decide which accounts to review.

With modern accounting software, the importance of using a trial balance to make sure total debits equal total credits has been somewhat diminished.  Most accounting software will not allow an entry with unequal debits and credits, thus reducing the possibility for this type of error.

 

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