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How to read a trial balance
A trial balance lists every account with its debit or credit balance. Learn what to look at, and what to do when the two sides do not match.
· 2 min read · Hexabooks
A trial balance is a list of every account in your books, with its balance as a debit or a credit. It answers one question: after all the entries you have recorded, do the debits and credits still agree? Hexabooks posts the debit and the credit for you when you record a transaction, so a healthy trial balance is a quick sign that your books are in order.
Open the report
Open Trial Balance from the reports menu and choose the dates you want. Pick the end of the day, month or year you are checking.
Read it in three steps
Look at the totals first. The total of the debit column and the total of the credit column should be equal. If they are, the entries behind the report balance.
Scan the account balances. Each account sits on the side where its balance belongs. Cash and bank accounts, what customers owe you, and stock normally show a debit. What you owe suppliers, and your sales, normally show a credit.
Look for the unexpected. A cash account with a credit balance, a customer who has paid more than they owe, or an expense with a credit balance are all worth a second look. They often point to a wrong date, a wrong party or an entry that was never approved.
When it does not match
If the two sides differ, check your work in this order. First, look for vouchers that are still waiting for approval, because they do not count until they are approved. Second, check the date range, and make sure you are comparing the same period. Third, open the account that looks wrong and read its entries one by one.
Keep a copy
You can download the report as a PDF or an Excel file, so your accountant sees exactly what you saw.
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