Trial balance is a statement, prepared with the debit and credit balances of Ledger accounts to test the arithmetical accuracy of the books. Trial Balance Format is also given below.
Features of Trial Balance
It is a list of balances of all ledger accounts and the cash book.
It is just a statement, and not an account.
It is neither a part of double entry system, nor does it appear in the actual books of accounts. It is just a working paper.
It can be prepared at any time during the accounting period, say, at the end of every month, every quarter, every half year or every year. Usually it is prepared at the end of accounting year before preparing the final accounts.
It is always prepared on a particular date and not for a particular period.
It is prepared to check the arithmetical accuracy of the ledger accounts.
If the books are arithmetically accurate, the total of all debit balances of a trial balance will be equal to the total of all credit balances.
A tallied Trial Balance is not a conclusive proof of the accuracy of the books of accounts since certain type of errors remain even when the Trial Balance tallies.
Need of Trial Balance
To ascertain the arithmetical accuracy of the ledger accounts.