Trial balance is a list of all balances standing on the ledger accounts of a firm at any given time.

Following are the main characteristics of a trial balance.

☛ It is a statement prepared in a tabular form.

☛ It has two columns: one for debit balances and another for credit balances.

☛ Closing balances as shown by ledger accounts are shown in the statement.

☛ It is not an account but only a statement of balances.

☛ It is prepared on the basis of balanced accounts.

☛ It is a method of verifying the arithmetical accuracy of entries made in the ledger.

☛ It helps in preparation of Trading account, Profit & Loss account and Balance Sheet at the end of the period which exhibit the financial position of the firm.