Glossary
What is a trial balance?
Every account on one page, debits on the left and credits on the right. If the totals agree, the books are arithmetically sound.
Updated
In short
A trial balance lists every account's closing debit or credit balance on a date, and the two totals must be equal. SimpleERP builds it from posted journals for any date, and the database guarantees it balances.
A trial balance is a list of every account in the ledger with its closing debit or credit balance on a given date. Because each journal entry has equal debits and credits, the two column totals must be equal. Accountants use it to check the books before preparing the profit and loss statement and the balance sheet, which are both built from the same balances.
Trial balance: a worked example
Lakshmi Steel Furnitures on 30 September 2026:
| Account | Debit | Credit |
|---|---|---|
| Fixed assets (net) | ₹6,80,000 | |
| Inventory | ₹4,85,000 | |
| Accounts receivable | ₹2,14,800 | |
| Bank and cash | ₹2,71,000 | |
| Cost of goods sold | ₹10,38,900 | |
| Operating expenses | ₹3,90,900 | |
| Accounts payable | ₹1,92,400 | |
| GST payable | ₹45,600 | |
| Term loan | ₹3,00,000 | |
| Share capital | ₹5,00,000 | |
| Retained earnings, prior years | ₹2,00,000 | |
| Sales | ₹18,42,600 | |
| Total | ₹30,80,600 | ₹30,80,600 |
What does a trial balance not catch?
An entry posted to the wrong account, an entry left out entirely, or the same wrong amount on both sides all leave the totals equal. A balanced trial balance proves the arithmetic, not that every entry is right.
FAQ
Questions, answered
Why would a trial balance not tally?
In manual books or spreadsheets: a one-sided entry, a transposed figure, a balance carried forward wrongly or a missed account. In software that refuses unbalanced journals it cannot happen, so attention moves to whether amounts went to the right accounts.
Is a trial balance a financial statement?
A trial balance is not a financial statement. It is a working report that checks the ledger. The financial statements, the profit and loss statement and the balance sheet, are prepared from its balances, with income and expense accounts going to the P&L and the rest to the balance sheet.
What is the difference between a trial balance and a balance sheet?
The trial balance lists every account, including income and expenses, as debits and credits. The balance sheet shows only assets, liabilities and equity, with the period's profit as one line in equity. Both are for one date and use the same figures.
Does my accountant need the trial balance?
Usually yes. It is the starting point for finalising accounts and the tax audit. Export it to CSV along with the general ledger, so the accountant can check balances and drill into any account without logging in.
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