What is trial balance and its purpose?

Question

1

Dutcher10 0 Comments

I have just learning accounting and I am getting confused with the purpose of the trial balance and the purpose of the extended trial balance.

1 Answer

score 1 · Answer 1 · 2012-12-02T15:47:27+00:00

The trial balance is essentially a summary of your financial statements. At the year end, the accounts close and the balances are moved to the trial balance. After that, adjustments are posted and the result is usually called extended trial balance. This extended trial balance is the source for your balance sheet and the income statement. So, the balances that you see in the trial balance are moved to financial statement line items in the balance or in the income statement.