What is a trial balance?
Definition of a trial balance
A trial balance is a report that shows the total of all your business's accounts, its assets, liabilities, income, costs and capital, as at a given point in time.
The trial balance is not a report that has to be sent to HMRC or to Companies House. It is a report that's for internal use in your business only.
Your accountant will often use your trial balance as a starting point to prepare your accounts, which they will then use to fill in your Tax Return, or your company's corporation tax return.
The trial balance is called a 'trial balance' because there will always be equal sums on the debit and credit sides of your trial balance.
Got questions? Ask Emily!
FreeAgent's Chief Accountant Emily Coltman is available to answer your questions in the comments.