---
title: "What is trial balance?"
description: "Trial Balance explained in plain English: definition, how it works, an example, and how it appears in QuickBooks and Xero."
url: https://ledgerbpo.com/glossary/trial-balance/
updated: 2026-09-11
publisher: LedgerBPO (SS Support Network LLC)
language: en-US
---

# What is trial balance?

Glossary

A trial balance is a report that lists every account in the general ledger along with its debit or credit balance, used to confirm that total debits equal total credits before financial statements are prepared.

Updated September 2026

## How trial balance works

At the end of a period, every account balance from the general ledger, cash, accounts receivable, revenue, expenses, is pulled into one list. Debit balances go in one column and credit balances go in another. If the two columns do not add up to the same total, there is an error somewhere in the books. This step is usually one of the first done during month-end close, before any financial statements are finalized.

Once the trial balance is in balance, accountants review it for accounts that look off, such as a negative balance where there should not be one, then use it to build the balance sheet and income statement. It is a quick check point, not a full guarantee that every entry is correct, since offsetting errors can still hide inside a balanced trial balance. Comparing the current trial balance to the prior period also helps catch an account that moved in an unexpected direction.

## Example

A small firm's trial balance shows total debits of $84,200 and total credits of $82,900, a $1,300 difference. Review finds a $1,300 rent payment posted only as a debit to rent expense with no matching credit to cash. Adding the missing credit brings both columns to $84,200, and the trial balance is now in balance.

## Trial balance in QuickBooks Online vs Xero

QuickBooks Online generates a trial balance automatically under Reports, pulling live balances from the general ledger. Xero offers the same report under its Accounting reports section, with the option to compare periods side by side. Neither tool requires manual entry, since the report updates as transactions are posted. Both tools let you drill into any account balance directly from the trial balance report for a closer look.

## Related terms

- [General ledger](https://ledgerbpo.com/glossary/general-ledger/)
- [Balance Sheet](https://ledgerbpo.com/glossary/balance-sheet/)
- [Adjusting entry](https://ledgerbpo.com/glossary/adjusting-entry/)
- [All terms](https://ledgerbpo.com/glossary/)

## How LedgerBPO handles trial balance

We review your trial balance every month before closing the books, catching unbalanced entries, miscoded accounts, and unusual balances early. A dedicated accountant and a second reviewer both check the numbers under our Two-Tier Review process. You get financial statements built on a trial balance that has already been checked twice. We compare the trial balance to the prior period every month to catch anything that looks unusual.

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Next step

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Source: https://ledgerbpo.com/glossary/trial-balance/ · Contact: https://ledgerbpo.com/contact/ · Full site map for agents: https://ledgerbpo.com/llms.txt