Trial Balance: Objects and Advantages

Trial Balance is a statement in which the debit and credit balances of all accounts are recorded with a view to ascertain the arithmetical accuracy of the books of accounts. The only condition is that accounts must be balanced in order to draw a Trial Balance. Trial Balance is not a part of journal or ledger. It is only a list or statement.

No posting can ever be made to a trial balance. Note that although its disagreement always signals the presence of an error, its agreement does not assure a conclusive proof as to the absolute accuracy of the books.


The objects of the preparation of Trial Balance are as follows:

1. A Trial Balance provides a good check on the accuracy of the work done in preparing the ledger accounts. When the total of the debit balances agrees with the total of credit balances it is quite a good proof that the ledger accounts have been correctly written up. If the trial balance totals do not agree, then it shows that there are some errors which must be detected and rectified before final accounts are prepared.

2. It brings together the balances of all the accounts at one place and thus facilitates the preparing of trading account and Profit and Loss Account, which is the result of the business; and the Balance Sheet to ascertain the financial position of the firm. In short, Trial Balance is the basis to prepare the final accounts.

3. The balance of any account can be easily and conveniently known by a trial balance.

4. It serves as a summary of what is contained in the ledger.

Advantages of Drawing up Trial Balance:

1. It summarizes the result of all transactions during a period.

2. It proves the arithmetical accuracy of accounting entries in the ledger.

3. It supplies in one place ready reference of all the balances of all the ledger accounts.

4. If any error is found, it can easily be rectified.

5. It is a basis, on which the final accounts of a firm can be prepared.

Submitted by : Dr. Athena, Category : Trial Balance