(c) A trial balance is a list of the accounts and their balances at a given point in time. A trial balance serves several purposes, including:
TIP: Scan over Exercises 2-3, 2-4, and 2-5. Notice the logical progression of the steps in recording, classifying, and summarizing the transactions. In Exercise 2-3, each transaction had to be identified and analyzed in terms of its effects on various accounts. Then the transactions were recorded in the journal. In Exercise 2-4, the information in the journal is transferred (posted) to the ledger. Thus, all transactions that affect individual components of the basic accounting equation are summarized together. In Exercise 2-5, the accounts are balanced, and a trial balance is prepared which furthers the summarization process and checks for the maintenance of equality of debits and credits in the recording and posting phases.