What is Trial Balance and Objectives in Accounting

 A trial balance forms a connecting link between the ledger accounts and final accounts Trial Balance is prepared to check the arithmetic accuracy of the books of accounts The fundamental principle of the Double Entry System of Accounting is that for every debit, there must be a corresponding credit. Thus for every debit or a series of debits given to one or several accounts, there is a corresponding credit or a series of credits of an equal amount given to some other account or accounts and vice-versa. It follows, therefore, that the sum total of debit amounts should equal the credit amounts of the ledger at any date. But if the various accounts in the ledger are balanced, then the total of all debit balances must be equal to the total of all credit balances if the books of accounts are arithmetically accurate.

Thus at the end of the financial year or at any other time, the balances of all the ledger accounts are extracted and written up in a statement known as trial balance and finally totaled up to see if the total of debit balances is equal to the total of credit balances. A trial balance may thus be defined as a statement of debit and credit totals or balances extracted from the various accounts in the ledger with a view to test the arithmetical accuracy of the books.

The agreement of trial balance reveals that both the aspects of each transaction have been recorded and that the books are arithmetically accurate. If trail balance does not agree it shows that there are some errors that must be detected and rectified if the correct final accounts are to be prepared. Thus, the trial balance forms a connecting link between the ledger accounts and final accounts. 

Objectives of the Trial Balance

• To have balances of all the accounts of the ledger in order to avoid the necessity of going through the pages of the ledger to find it out 
• To have a proof that the double-entry transaction has been recorded because of its agreement
• To have material for preparing the profit and loss account and balance sheet of the business
• To have arithmetic accuracy of the books of accounts because of the agreement of the trial balance