Concept
Verifying Your Books
A trial balance lists all accounts and their balances at a point in time. Total debits must equal total credits. If they don't, there's an error somewhere in your journal entries or posting process.
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FARLesson 4 of 5
The Trial Balance
Example
Simple Trial Balance
Cash: $47,000 (Debit)
Equipment: $10,000 (Debit)
Notes Payable: $7,000 (Credit)
Owner's Capital: $50,000 (Credit)
Total Debits: $57,000 = Total Credits: $57,000 ✓
Key Point
A balanced trial balance doesn't guarantee all entries are correct — it only confirms debits equal credits. Errors like posting to the wrong account won't be caught.
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Practice questions from this module to reinforce what you learned.