A Trial Balance is a financial statement that summarizes the balance of accounts for a company. It is a useful tool for accountants to identify possible errors and oversights in accounting, or to determine whether a business needs to make any adjustments to the way it operates.
The Trial Balance summarizes the assets, liabilities, and owner’s equity for an entire accounting period. A company’s principal accountant usually prepares it, with the help of an assistant or a junior employee. There are two sides to a Trial Balance: an ending balance and a starting balance.
The ending balance represents all the transactions that took place during the accounting period that ended on the date of the Trial Balance.
The starting balance represents all the transactions that took place during the accounting period that began on the day the Trial Balance was prepared.