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9706 · 1.4.2

Trial balance

9706 P2 — preparing a trial balance, suspense account, and errors revealed/not revealed.

Need to know

What you need to know

  • It is a list of all ledger account balances.
  • Its primary function is to check the arithmetical accuracy of the ledger.
  • Total debit balances must equal total credit balances.
  • It is an internal working paper, not a formal financial statement.
  • It is the basis for preparing the income statement and statement of financial position.

Explanation

Trial balance

  1. It is a list of all ledger account balances.
  2. Its primary function is to check the arithmetical accuracy of the ledger.
  3. Total debit balances must equal total credit balances.
  4. It is an internal working paper, not a formal financial statement.