What is a trial balance?
A trial balance summarizes a company’s transactions from the general ledger. A trial balance includes all of the balance sheet and income statement accounts.
The trial balance will list out all of the accounts in the chart of accounts with the associated debit or credit balance. The trial balance can be prepared at the end of each reporting period. It is important to understand that the trial balance must sum to zero, which means that the total debits equals the total credits.
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What is the difference between the general ledger and a trial balance?
Transactions (sales, expenses, etc.) are recorded in the general ledger to specific accounts. In bookkeeping systems, the accountant can then run a trial balance report, and it will summarize all of the activity (debits and credits) to each trial balance account. It’s important that the trial balance sums to zero! The trial balance can then […]
What is the general ledger?
The general ledger, which is commonly referred to as the “GL”, is where all accounting transactions are stored. A general ledger employs double-entry bookkeeping, which means that each transaction must impact 2 accounts and the debits and credits must equal. The general ledger is the most granular level of a company’s accounting records. Activity in […]