Which term is defined as an informal statement proving that total debit balances are equal to the total credit balances in the ledger?

• A. Trial Balance
• B. Balance Sheet
• C. Source Document
• D. Income Statement

Answer: (A)

In double-entry bookkeeping, every transaction affects both sides of the equation, so the total debits should equal the total credits. The trial balance is an informal listing that compiles all ledger accounts and their ending balances to show that equality. It acts as a check on the ledger’s arithmetic and posting, helping to catch errors, missing entries, or misposted amounts. It’s not a financial statement; it doesn’t provide performance or position details, and it doesn’t guarantee correctness of individual transactions. The other items are different reports: a balance sheet presents assets, liabilities, and equity at a moment in time; a source document is the original record of a transaction; and an income statement summarizes revenues and expenses over a period.