The purpose of a trial balance is to verify the accuracy of account balances in the generalledger by listing each account's debit and credit balances to ensure they agree.
Preparing a Trial Balance
list all accounts, set up debit/credit columns, list balances, add debit/credit balances, and verify that total debit equals total credit.
Importance of Verification
Verification helps detect and correct errors, ensures financial statements are reliable, and maintains internal control.
Common Errors in Trial Balance
Arithmetic errors, postingerrors, invalid/missingtransactions, accounting principle errors, and inconsistent recording.
Identifying Arithmetic Errors
Verify totals, check posted transactions, check addition/subtraction, check decimal places, and check for rounding errors.
The trial balance is prepared at the end of an accounting period toensure that debits equal credits.
The totals of the debit and credit columns must always match each other.
