The trial balance
Trial balance — a statement of the ledger balances on a particular date.
Uses of a trial balance
- Summarises the accounts of a business.
- Checks the accuracy of double-entry bookkeeping.
- Makes it easier to prepare financial statements.
Limitations of a trial balance
- Takes time to prepare.
- Errors may still exist. Errors that do not affect the trial balance: commission, compensating, complete reversal, omission, original entry and principle.