Basics Updated November 2026

Trial balance

A trial balance is a list of all ledger accounts and their balances at a date, with debit balances in one column and credit balances in the other. If the two column totals are equal the ledger is arithmetically in balance; it does not prove that every entry was posted to the right account.

Syntax

List accounts in ledger order: assets, liabilities, equity, revenues, expenses; debit column total = credit column total

Part	What it is
`Unadjusted trial balance`	Prepared from the ledger before adjusting entries.
`Adjusted trial balance`	Prepared after adjusting entries; the financial statements are built from it.
`Post-closing trial balance`	Prepared after closing entries; contains only balance sheet accounts.

Examples

Cash 7,200 Dr; Accounts Receivable 3,000 Dr; Supplies 800 Dr; Equipment 15,000 Dr; Accounts Payable 2,500 Cr; Notes Payable 8,000 Cr; Owner's Capital 12,000 Cr; Service Revenue 6,000 Cr; Rent Expense 1,500 Dr; Wages Expense 1,000 Dr

Result: Debits 28,500 = Credits 28,500

Each account appears once with its ending balance on its normal side.

Debits total 28,500, credits total 28,410: difference 90, divisible by 9

Result: Likely a transposition (for example 1,500 posted as 1,050) or a slide (800 posted as 80)

A difference divisible by 9 is the classic sign of transposed digits.

Debits total 28,500, credits total 27,700: difference 800, and Supplies is 800

Result: An 800 balance was probably left out of the credit column or an entry was posted only once

If the difference equals an account balance, check that account first; if it is twice a balance, that balance is in the wrong column.

Common mistakes

Believing an equal trial balance means the books are correct: an entry posted to the wrong account, omitted entirely or recorded twice still balances.
Listing an account on the wrong side: a contra account such as Accumulated Depreciation sits in the credit column even though it belongs to assets.
Using transaction totals instead of ending balances: the trial balance shows each account's net balance, not the sum of its debits and credits separately.

Practice Trial balance

These drills check your answer on live data, free, no account needed.

Closing revenuesHilltop Pet Sitting, Inc. closes its books through Income Summary. At year end, before closing, Service Revenue has a credit balance of $58,400 and Interest Revenue has a credit balance of $260. Record the entry that closes the revenue accounts.

Questions

What is the purpose of a trial balance?

To check that total debits equal total credits in the ledger before preparing adjustments and financial statements, and to provide a convenient list of all balances.

What errors does a trial balance not detect?

Omitted transactions, entries posted to the wrong account with the right amount, entries recorded twice, and compensating errors that offset each other.

What does it mean if the trial balance difference is divisible by 9?

It usually points to a transposition (digits swapped, such as 540 for 450) or a slide (decimal moved, such as 45 for 450).

Debits and creditsDebits and credits in plain English: the rule for assets, liabilities, equity, revenue and expenses, the DEALER memory aid and worked entries.
Closing entriesHow to close the books: close revenues and expenses to Income Summary, close Income Summary to Retained Earnings, then close Dividends. Worked example.
Journal entry formatThe standard journal entry format: date, debit accounts first, credits indented, amounts in two columns and a short explanation. Simple and compound examples.
Retained earningsWhat retained earnings are, how net income and dividends change them, the closing entries that post to the account, the formula and what a deficit means.