What is a trial balance and what does it verify?

• A. A list of all journal entries in a period; verifies postings to ledgers.
• B. A list of all ledger balances at a date; verifies that total debits equal total credits.
• C. A statement of cash flows; verifies cash movements.
• D. A summary of equity accounts only; verifies owner investments.

Answer: (B)

A trial balance is a listing of each general ledger account with its balance as of a specific date, showing whether that balance is a debit or a credit. The main purpose is to verify that the total of all debit balances equals the total of all credit balances in the ledger. This check helps catch arithmetic mistakes and posting errors after journal entries have been posted, and it serves as a handy step before preparing financial statements.

Keep in mind that even when debits and credits balance, it doesn’t guarantee everything is perfect—some errors can still exist (like a transaction not posted at all or two equal but incorrect amounts posted on opposite sides that still balance). So, the description that fits best is a listing of ledger balances at a date with the verification that total debits equal total credits.