trial balance

Intermediate 💰 Finance / Accounting

Definition

A report listing all general ledger accounts with their debit or credit balances to verify that total debits equal total credits. When they don't match, accountants enter panic mode because double-entry bookkeeping isn't supposed to be optional.

Example Usage

The trial balance was off by $0.37, and Susan spent three hours finding the transposed digits causing the discrepancy.

Origin

Fundamental to double-entry bookkeeping systems developed in Renaissance Italy.

Fun Fact

A balanced trial balance doesn't guarantee error-free books—you could have posted transactions to entirely wrong accounts and it would still balance.

Source: Basic bookkeeping terminology

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