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.
Example of a trial balance report:
This trial balance report was created using FreeAgent.
Got questions? Ask Emily!
FreeAgent's Chief Accountant Emily Coltman is available to answer your questions in the comments.