Entity: TRIAL-BALANCE
A trial balance is a statement that lists the final balances of a company's ledger accounts to test their equality in a double-entry bookkeeping system.
TRIAL-BALANCE
Etymology
The term 'trial balance' originates from the accounting practice of testing the equality of debit and credit balances in a double-entry ledger.
Definition
A trial balance is a statement that lists the final balances of a company's ledger accounts at a specific date to ensure the accuracy of the double-entry bookkeeping system.
Historical Context
The concept of trial balance has been a fundamental part of accounting practices since the development of double-entry bookkeeping in the 15th century.
Cultural Significance
Trial balance plays a crucial role in financial reporting and auditing, providing a snapshot of a company's financial position at a given time.
Related Concepts
- Double-entry bookkeeping
- Ledger accounts
- Financial reporting
See Also
A statement that lists the final balances of a company's ledger accounts to test their equality in a double-entry bookkeeping system.