Trial balance
Definition
A list of every account balance at a date, with total debits equal to total credits. It is the starting point for consolidating a company's figures.
Why does it matter in a group?
Every consolidation starts with one trial balance per company. The accounts in it are matched to the group chart of accountsGroup chart of accountsOne list of accounts that every company's own accounts are mapped to, so that figures from different companies and systems add up line by line.Open the glossary entry, then translated and added with the others. For a company on a system with no direct connection, a trial balance exported to Excel or CSV is all that is needed. The first check is that debits equal credits. If they do not, something is missing from the export. A trial balance that nets to zero can still be wrong, because balances can sit in the wrong accounts, so the group also compares opening balances with last month’s closing.
A small example
A small trial balance has debits of cash 500,000, receivables 300,000 and expenses 400,000, which is 1,200,000. Its credits are payables 200,000, share capital 400,000 and revenue 600,000, which is also 1,200,000.
Related terms
Used in these posts
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