TRIAL BALANCE

A trial balance is a schedule or list of debit and credit balances extracted from various accounts in the ledger including cash and bank balances from cash book. Since every transaction has a dual effect i.e. every debit has a corresponding credit and vice versa, the total of the debit balances and credit balances extracted from the ledger must tally. Thus, at the end of the accounting period or at the end of each month, the balances of the ledger accounts are extracted and trial balance is prepared to test as to whether the total debits are equal to total credits or not.