What does a "trial balance" report do in accounting?

A trial balance report serves the fundamental purpose of listing all the accounts from the general ledger along with their respective balances at a specific point in time. This comprehensive overview allows accountants to verify the arithmetic accuracy of the recorded transactions. By ensuring that total debits equal total credits, the trial balance acts as an essential tool in identifying any discrepancies or errors that may have occurred during the accounting process.

In addition to verifying correctness, this report serves as a preliminary step before financial statements are prepared, providing a clear snapshot of the company’s accounts. It does not summarize revenues and expenses like an income statement, nor does it track cash flows like a cash flow statement. Moreover, it doesn't solely focus on net income, as that information is derived from other financial statements. The trial balance is crucial for maintaining accuracy in financial reporting and ensuring that the underlying accounting records are correct before moving on to further financial analysis and reporting.