Explanation

A trial balance lists all ledger account balances to verify that debits equal credits. Its prepared after posting journal entries to ledgers. Two columns: debit balances and credit balances.

If totals match, books are arithmetically correct (though errors like wrong account or compensating errors may still exist). If they dont match, there are posting or calculation errors.

Assets and expenses have debit balances; liabilities, capital, and income have credit balances. Trial balance is an intermediate step before preparing financial statements.