Trial balance: The raw material for financial statements

- Once all journal entries are posted…to individual accounts,…a balance for each account can now be computed.…Remember, if the debits and the credits are equal,…for each journal entry,…the totals of the debits and credits should still be equal…after all of the journal entries are posted to the ledger.…This can be verified by looking…at the company's trial balance,…which is a listing of all of the company's ledger accounts…and their balances.…Veda's end-of-year trial balance looks like this…after all of the journal entry amounts have been posted…to the respective accounts.…

Note that the total of the debit balances…in Veda's ledger is $3,478,000,…which is equal to the total of the credit balances.…When manual accounting systems were predominant,…the equality of debits and credits…in the trial balance was used to indicate…whether the posting process had been completed correctly.…From a trial balance, we can easily prepare a balance sheet…and an income statement.…Each account, with its associated balance,…is merely copied to the appropriate place…