Module 1 · Foundation · 8 min read

Trial balance basics

You will be able to: Read a trial balance and say what its two Closing totals must show; Explain what a balanced trial balance proves and what it cannot prove; Use the trial balance to spot where to investigate next.

  • Read not done yet
  • Self-check: not taken not done yet
  • Lesson complete not done yet

A trial balance lists every account with a balance and adds up the debits and the credits. If the books are kept with double entry, the two totals must be equal. It is the quickest health check an accountant has, and the first thing to run before producing the Profit & Loss or Balance Sheet.

Running it in Zeyto

Open Reports, then Trial balance. Set As on to the date you want and press Run. Each row is one account in code order. The columns are:

The Trial Balance report with one row per account showing period debit, period credit and closing debit and credit, with a TOTAL row at the bottom.

Reports, Trial balance: the two closing totals must be equal.

Reports, Trial balance: the two closing totals must be equal.
  • Opening Dr and Opening Cr (optional columns): the balance before the period starts.
  • Period Dr and Period Cr: debits and credits posted in the period.
  • Closing Dr and Closing Cr: the balance on the As on day, on its natural side. This is the pair you read first.

The TOTAL row adds each column. The two Closing totals should be equal. Only accounts with a balance or movement are listed. Rows do not open anything: for the entries behind a balance use the General Ledger or Account statement. Figures follow each document's own date, and drafts post nothing so they never appear.

A small trial balanceAfter the three transactions in lesson 3 (owner invests AED 50,000, credit purchase of stock AED 2,000 plus VAT, cash sale of AED 1,000 plus VAT) the closing balances are: Cash in Hand 51,050 Dr (50,000 + 1,050) Inventory 2,000 Dr VAT Input 100 Dr Trade Payables 2,100 Cr VAT Output 50 Cr Owner's Capital 50,000 Cr Sales 1,000 Cr Debits: 51,050 + 2,000 + 100 = 53,150. Credits: 2,100 + 50 + 50,000 + 1,000 = 53,150. The totals match. (We left out the cost of the goods sold to keep the numbers short; lesson 7 adds it.)

What a balanced trial balance proves

It proves that total debits equal total credits. That is all. It does not prove that every entry is correct. These errors still leave it balanced:

The bottom of the Trial Balance showing the TOTAL row where closing debit equals closing credit.

The TOTAL row: closing debit and closing credit agree.

The TOTAL row: closing debit and closing credit agree.
  • The right amount posted to the wrong account (rent debited to Utilities instead of Rent).
  • A transaction left out entirely, on both sides.
  • A transaction posted twice, on both sides.
  • Two mistakes of the same size on opposite sides that cancel each other.

Zeyto removes many of these risks because documents post themselves from the lines you enter. The risk that remains is mainly human: choosing the wrong account on a journal, or the wrong item or tax code on a document.

What an unbalanced trial balance would mean

In Zeyto a document that does not balance cannot be posted, so a difference points to something unusual: opening balances entered with a difference, or a data problem that support should look at. When you post opening balances that do not balance, Zeyto makes the journal balance with one line on the Opening Balance ledger (code 3900 in the standard chart) and shows the amount so you can find and fix the missing entry. Lesson 8 covers this.

Using it well

  • Run it at the end of each month and compare with the last month.
  • Read the big lines first: do receivables, payables, stock and bank look right?
  • A negative stock or an odd credit balance on an asset deserves a look in the General Ledger.
  • Group-wise report shows the same figures as a tree of groups; its top groups add up to the trial balance of the same period.
Watch outCancelling or amending an older document changes the balances of its own, older date, not today's. If a past month's trial balance changes, look for an amended or cancelled document dated in that month.

Try it in the demo

  1. Open https://demo.zeyto.app/demo-app/ and sign in (user admin, password demoAdmin123). This is a public demo with sample data, so nothing you do there affects a real business.
  2. Open Reports, then Trial balance. Set As on to today and press Run.
  3. Find the TOTAL row and compare Closing Dr with Closing Cr. They should be equal.
  4. Pick one account with a large balance, then open the General Ledger or Account statement for it to see the entries behind the number.
Open the live demo

Public demo company, sign in as admin / demoAdmin123. Data refreshes nightly.

Key takeaways
  • The trial balance lists every account's balance; Closing Dr must equal Closing Cr.
  • A balanced trial balance proves only that debits equal credits, not that every entry is correct.
  • Use it each month, then drill into ledgers for anything odd.

Check yourself

3 questions on this lesson. Not timed, not the exam, and you can try again. Score 60% or more, and read the lesson, to complete it.

1. What should the two Closing totals of a trial balance show?

2. A trial balance has Closing Dr 53,150 and Closing Cr 53,150. What can you conclude?

3. Which errors would a trial balance NOT reveal? (Select two.)

Select all that apply.

Previous: Ledgers and account statementsNext: How every Zeyto document posts to the ledger

Practice questions for this module · Printable study sheet