After many transactions have been journalized and posted, how do you know the ledger wasn't fumbled somewhere along the way? A trial balance is a list of the ledger account balances. The total of the debit balances should equal the total of the credit balances. The trial balance is prepared to check the mathematical accuracy of the ledger — it's a checkpoint, not a financial statement shown to outsiders.
| Account | Debit | Credit |
|---|---|---|
| Cash | $9,500 | |
| Accounts Receivable | $700 | |
| Supplies | $750 | |
| Equipment | $6,000 | |
| Truck | $9,000 | |
| Bank Loan | $8,000 | |
| Accounts Payable | $400 | |
| J. Reyes, Capital | $17,000 | |
| J. Reyes, Drawings | $400 | |
| Fees Earned | $2,450 | |
| Rent Expense | $700 | |
| Wages Expense | $650 | |
| Gas Expense | $150 | |
| Totals | $27,850 | $27,850 |
What a Trial Balance Proves — and Doesn't
Equal totals is not the same as "correct"
A trial balance only proves that the total debits equal the total credits in the ledger. It does NOT prove that every transaction was recorded in the right account, that no transaction was missed entirely, or that an amount wasn't accidentally recorded twice in matching debit and credit accounts. Some errors are invisible to a trial balance.
- Errors a trial balance WILL catch: posting a debit without a matching credit, adding a column incorrectly, posting an amount to only one account.
- Errors a trial balance will NOT catch: posting a transaction to the wrong account (e.g., debiting Equipment instead of Supplies, but still balancing), forgetting to record a transaction entirely, or recording the correct amount on the correct side of the wrong pair of accounts.
Finding the Error When It Doesn't Balance
If the trial balance doesn't balance, two arithmetic slip-ups are common enough to have their own names and their own quick tests. A transposition error happens when two digits are accidentally swapped, like writing $981 instead of $918. A slide error happens when a decimal point shifts, like writing $45.00 instead of $450.00.
- The divide-by-9 trick: if the difference between total debits and total credits is evenly divisible by 9, suspect a transposition error (swapped digits) or a slide error (misplaced decimal).
- The divide-by-2 trick: if the difference is evenly divisible by 2, suspect that an amount was recorded on the wrong side (debit instead of credit, or vice versa) — dividing the difference by 2 often reveals the exact amount that was flipped.