Still trying to understand the concept of trial balances in business accounting? This report provides insight into the accuracy of your busines’s financial records. Therefore, it’s important for business owners and professional accounts to create a trial balance report on a regular basis.
Trial Balance: The Basics
The primary purpose of a trial balance is to show that the value of all debit balances equals the value of all credit balances. If the debit column in your business’s trial balance reports shows a higher or lower value than the credit column, it indicates an error in the ledger accounts, in which case you must identify and correct it before creating a profit and loss statement. Trial balances are most commonly used for double-entry accounting, which involves giving every transaction two or more accounts.
Basically, a trial balance is a worksheet or report that contains the value of all ledgers, which are separated into debit and credit columns. Most businesses create trial balances at the end of a reporting period. However, there’s no specific rule stating that you must create a trial balance report at a certain time. Some businesses ignore them altogether. In doing so, however, they place their business at risk for accounting errors.
How to Generate Trial Balance Report in Quickbooks
You can easily create a trial balance report using the Quickbooks accounting software in just a few simple steps. Assuming you use Quickbooks Desktop, log in to your account and access Reports > Accounts & Taxes > Trial Balance. Quickbooks will then show you a report containing two columns: a debit and credit column. At the bottom of these columns are the totals for the respective transactions. These two columns should be exactly the same. If one column contains a different amount than the other, you should go back over the transactions to identify and correct the erroneous entry.
You can also run a trial balance report using Quickbooks Online — the cloud-based version of Intuit’s popular accounting software. From the dashboard, click the “Tax” column, hover over the client for whom you wish to run the report and click “Start Review.” Next, click the pencil-shaped icon next to “Tax Year.” This will bring up a new screen with information pertaining to your chart of accounts. If you need help running a trial balance report, contact your Quickbooks vendor for assistance.
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