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Reading a trial balance and investigating errors
A trial balance brings ledger balances into a reviewable list. Use it to trace questionable accounts to their underlying entries, rather than treating equal totals as proof that every transaction is correctly classified.
This guide describes common bookkeeping practice, not a legal or regulatory requirement.
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General information, not legal or tax advice.
Follow the path from journal to ledger
Publication 583 describes transactions entering journals before being posted to ledger accounts. Start a trial-balance review by identifying the reporting cutoff and obtaining the related ledger detail. A balance without its transactions is difficult to explain when the owner or CPA asks what it contains.
Sources: IRS Pub 583
Compare the debit and credit totals
The double-entry system places debits and credits on opposite sides of accounts and requires total debits to equal total credits after posting. If a manually assembled trial balance does not agree, trace the transfer from ledger balances before changing the books. A transcription mistake may be in the worksheet.
Sources: IRS Pub 583
Investigate balances that look out of place
IRS guidance identifies ledger groupings for income, expenses, assets, liabilities and net worth. As a practical review, open unusual balances and read the descriptions, payees and source documents. A balanced entry can still point to the wrong account or period, so arithmetic alone is an incomplete check.
Sources: IRS Pub 583
Keep a correction trail for the reviewer
List each proposed reclassification with the original account, supporting document and reason. Preserve the reviewed trial balance alongside the revised version and identify unresolved items for your CPA. Avoid using a miscellaneous account simply to make an unexplained difference disappear.
Compare payroll liabilities with filed returns
For the Q3 2026 federal payroll return, the verified calendar date is November 2, 2026, because October 31 falls on a Saturday. As a trial-balance review step, compare the filed liability and recorded payments with the payroll liability accounts. Keep timing differences separate from proposed corrections so an unpaid balance is not cleared merely because the return was submitted.
Sources: follow the path from journal to ledger
Resolve unexplained ledger balances
Tidwell helps reconcile the books and organize supporting schedules for your business decisions. We work with your CPA on tax questions and the financial records they need.