A trial balance is a listing of the various accounting general ledger balances at
the end of a specific accounting cycle. It is generally presented in a debit/credit
format with debit balances appearing on the left and credit balances appearing on
the right. In some cases, the trial balance may be displayed in a single column
format with the credit balances presented as negative amounts.
One of the original
purposes of trial balance presentations was to assure that the accounting records
were, in fact, in balance (debits=credits) in a double entry accounting system.
Debits and Credits are simply a way of attributing a plus or minus to various accounts
within the general ledger. Debit amounts represent positive balances in Asset, Equity
withdrawal, and Expense accounts. Credit amounts represent positive balances in
Liability, Equity, and Revenue accounts.
Most accountants who prepare financial statements and tax returns for business and
other entities need some form of trial balance software to automate the process
of making various final adjustments and combining various accounts for the preparation
of financial and tax
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related documents. In most cases, the entity’s internal accounting system contains
accounts in much greater detail than is desirable for external financial presentations
and tax submissions. Trial balance software can make this data accumulation process
more efficient and result in a total automation of this process in subsequent periods
with well designed software.
In addition, if the entity maintains its internal accounting records on a different
basis than it uses in the preparation of its tax returns, trial balance software
provides for the necessary adjustments to the accounts, without disrupting the entity’s
internal accounting.
Lastly, for CPAs and other financial professionals, a well designed software package
can automate the conversion of an entity’s general ledger balances to professional
appearing financial presentations, and in the case of TBFSwriter, provide an efficient
means to consolidate separate entities and trial balances into a single financial
entity for consolidated statements.
While we believe that our trial balance packages are the most
intuitive, easiest to use, and most cost effective products on the market, we encourage
users to find the product that best meets their specific needs.
To review some of the most prominent trial balance software packages and additional information consider the following sources:
- CPAwriter, Inc.
- Caseware International
- CCH Prosystems Incorporated
- Creative Solutions (Thomson Reuters)
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