The Trial Balance - The Trial Balance A trial balance lists...

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The Trial Balance A trial balance lists accounts and their balances at a given time. A company usually prepares a trial balance at the end of an accounting period. The accounts are listed in the order in which they appear in the ledger. Debit balances are listed in the left column and credit balances in the right column. The totals of the two columns must be equal. The trial balance proves the mathematical equality of debits and credits after posting. Under the double-entry system this equality occurs when the sum of the debit account balances equals the sum of the credit account balances. A trial balance may also uncover errors in journalizing and posting. For example, a trial balance may well have detected the error at Fidelity Investments discussed in the Feature Story . In addition, a trial balance is useful in the preparation of financial statements. These are the procedures for preparing a trial balance: 1. List the account 2. Total the debit column and total the credit column.
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