Understand what is trial balance in accounting?

The trial balance is an accounting statement that gathers all accounts in motion in the company and their respective balances (debit balances / debit balances and credit balances / credit balances).

Through the trial balance it is possible to arrive at several important results for the Accounting of a company in a given period of time, as well as to prepare other important accounting statements, such as, Statement of Income for the Year (DRE) and Balance Sheet (BP).

It is the list of Accounts extracted from the company’s general ledger (ledgers), that is, it is the set of all accounts (equity and result) of the ledgers with their respective final balances. The balance of each account is represented according to its nature (debtor or creditor), and not just according to the group to which it belongs.

That is, to prepare a balance sheet, each Account will be transferred from the ledger to it, with its respective balance. Thus, if the Account on the ledger points to the final debit balance (left side), this balance will be carried over to the debit balance column of the trial balance. If the Account shows the creditor final balance (right side), this balance will be carried over to the credit balance column of the trial balance.

There are several ways to present a Trial Balance. In all of them, there should be a heading indicating the company name and the balance sheet date. It is possible to represent it with the opening balances of each account (debtor or creditor) and with the respective movements in the period (debits and credits), or simply with the final balances of the accounts (debtor or creditor). The latter case is the most common and also the most practical.

The preparation of a trial balance begins with the realization of the sums of the records of each account, both in the debit / debit and in the non-existence / credit. In the next step, the balance of each account is obtained (the difference between the debit and the credit). Finally, the sums and balances obtained are transferred to the balance sheet.

The trial balance can be edited whenever necessary, since it does not have a mandatory content.In general, the balance sheet is a voluntary document for the entrepreneur, although it is recommended so that he can accurately know the financial status of his company without having to drag and reproduce errors when preparing the annual accounts.

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