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The concept of a trial balance: A trial balance is a listing of the accounts in a company's general ledger and their balances as of a specific date. A trial balance is prepared at the end of an accounting period and is used to see if additional adjusting entries are required to any of the balances. The basic accounting system relies on double-entry accounting, therefore, the trial balance will have the same total debits and the same total credits. A trial balance is out of balance when the debits do not agree with the credits.

Basic principles The table below shows the positioning of credits and debits within the general ledger.

Debit Credit Drawings Capital Assets Liabilities Expenses Income