The Trial balance is an evaluation of Bookkeeping which shows, in particular, debit and credit transactions for the managed accounts as well as the resulting balances.
What is a trial balance?
The trial balance summarises the postings recorded on individual accounts for a specific period. This makes it possible to see which movements have been posted to an account and what balance results from them.
The common abbreviation for trial balance is trial balance.
What does a trial balance show?
The exact configuration may vary depending on the Buchführung system and the selected evaluation. Typical details of a trial balance are:
- Account number
- Account name
- Initial or presentation value
- Target turnover
- Credit sales
- Account balance
Depending on the evaluation, values for a single time period or additionally accumulated values can be displayed.
What is the connection with the General ledger?
I'm Ledger business transactions are recorded in the respective general ledger accounts. The trial balance consolidates the account information available there into a clear presentation of movements and balances.
It thus enables a quick overview of the values of the individual accounts without having to display every single transaction of an account individually.
What is the difference between trial balance and MANAGEMENT ACCOUNTS?
The trial balance and the management accounts (MANAGEMENT ACCOUNTS) are based on Buchführung data, but serve different functions.
The trial balance represents values at the individual account level. A MANAGEMENT ACCOUNTS, on the other hand, aggregates selected accounting values into business-structured items and performance figures.
In short: The trial balance shows accounts and their balances, while the MANAGEMENT ACCOUNTS condenses accounting data into a business management report.
Is the trial balance a Annual financial statements?
No. A trial balance is neither a Balance sheet nor a profit and loss statement, and by itself does not constitute a Annual financial statements.
However, the account balances included may be important for reconciliations and for the preparation of further financial statement analyses.
