Meaning and Definition of a Trial balance
After posting the accounts in the ledger, a statement is prepared to show separately the debit and credit balances such a statement is known as the trial balance. It may also be prepared by listing each and every account and entering in separate columns the totals of the debit and credit sides. Which ever way it is prepared, the totals of the two columns should agree. The various definitions given by different authors on Trial Balance given below:
According to Carter:
“Trial balance is the list or debit and credit balances, taken out from ledger; it also includes the balances of cash and bank taken from cash book”.
According to Rowland:
“The final statement of balances, joint and mixed, is called Trial Balance”.
According to Pickles:
“The statement prepared with the help of ledger balances, at the end of financial year (or at any other date) to find out whether debit total agrees with credit total is called Trial Balance”.
According to double Entry System of Accounting
“After recording all transactions into journal and posting them into ledger and ascertaining their balances, the statement prepared to ascertain the arithmetically accuracy of accounts on a certain date is. Called Trial Balance, is the statement, on the basis of which, trading profit and loss account and balance sheet is prepared.
Under the Double Entry System, the amount written on the debits sides of various accounts of the trial balance will always be equal to the amounts entered on the credit sides of other accounts and vice versa.