 Hello, learners. I welcome you to this session. In this session, we will discuss about trial balance, which is included in the financial accounting course of Become First Semester. In this particular session, we will discuss about the concept and importance of trial balance. We will also discuss the format of trial balance and the situations when a trial balance is said to be agree or disagree. We will also discuss the importance of trial balance. So, let us first see what is trial balance? A trial balance is simply a list of laser balances. Laser balances means all the lasers of assets, liabilities, expenses, etc. We have discussed about general laser in other sessions. So, the lasers that we have discussed, the balancing of lasers and after balancing all the lasers, the trial balance will be prepared and all laser balances will be included in this particular trial balance. So, trial balance, very simply you can define it as a list of laser balances. And trial balance is prepared after all the laser accounts are prepared and balanced, as well as after the finalization of casebook. After the preparation of trial balance, we can move forward towards the preparation of final accounts. So, before that, let us see the usual format of trial balance. So, trial balance can be prepared in different format. They are all very simple. So, this is a particular format where we record the different lasers on the debit side with their amount and their credit laser accounts with the credit side of the trial balance. So, here the important point to be noticed is that the figure, the total figure of trial balance means the total of debit column amount and the credit amount of the trial balance are the same. So, in this particular format is just an example with imaginary figures and the laser accounts. The figure, the total figure is 1,15,000 on both the sides of debit and credit of the trial balance. So, it indicates that the trial balance is agreed means the total amount of debit and the total amount of credit is equal. Now, how it becomes equal, this is very interesting. So, to know that, let us first have a discussion on the system of accounting. You are aware that the whole system of accounting is moved through the different stages. First of all, we record the transactions in the journal book that is known as journalizing of transactions. So, journal is the chronological recording of the financial transactions that take place in the business. After the journal entries, we post the journal entries into laser. So, it is known as laser posting. After posting of all the transactions from journal to laser, we balanced the laser. Means we find out the total amount. It may be on the debit side or on the credit side of the particular laser account. And then we pass the necessary closing entries and after that we prepare the trial balance, which is the main point of discussion of today's session. So, we prepared a trial balance after following the stages starting from the recording of the journal, posting of journal entries to laser, balancing of the laser accounts, passing of the closing entries and then we prepared a trial balance in the format that we have already discussed. And if the trial balance agree, then in the process of accounting, we can move forward towards the preparation of final accounts. Now, in the system of bookkeeping or in a system of accounting, after balancing the laser accounts, the bookkeeper should ensure that no mistakes have been committed in the process. In the process of recording transactions means starting from the recording of the transaction in journal, then posting them to the laser, then balancing all the steps should be correct. And these correct steps will give you the correct result. So, it is the bookkeeper, he or she will ensure that no mistakes have been done in the process of recording the transactions in different books of accounts. So, the trial balance helps the bookkeeper in ensuring that the records are arithmetically correct. So, when we record the transactions in the journal, then we again transfer them to the laser, we count them, we balance them. So, in the entire process, there may be some mistakes that may have been committed. And preparing the trial balance helps us in ensuring that no mistakes have been done in the process. So, when we discuss about the preparation of trial balance, we must know when the trial balance is agreed or when the trial balance is not agreed. So, depending on that, we can take the further step. So, as in the format we have already discussed that in the figure, the debit amount and the credit amount were the same. That is 15,000 in both the sides, debit side and credit side. So, in that case, the trial balance is said to be agreed. But if there is some disagreement, means the debit amount column is not equal to the credit amount column of the trial balance, then it is said that the trial balance is not agreed. So, if both the columns, amount column of the trial balance are equal, then the trial balance is said to be agreed. And it is opposite is the case when the trial balance is disagree. Disagree means the amount of debit column and the amount of credit column of the trial balance does not match. So, in that case, the trial balance is said to be disagree. Now, this all helps us in understanding the importance of trial balance in the whole system of recording the transactions. So, when we prepare a trial balance, it ensures that no mistakes have been committed in the process of bookkeeping. So, there are various signs. There may be a human error. There may be anything may happen that result in some mistakes, some errors in the process of maintaining the records. So, trial balance gives a check. It gives us some indication about the correctness of the records that we are maintaining. So, if there is any errors, then the trial balance will indicate us. It gives us some information regarding the disagreement of the amount. As the amounts are not equal, so it will help us in understanding the fact that some mistakes are there. So, if the trial balance is agreed, then we can say that the process of bookkeeping, the system of recording the transactions, is arithmetically correct. So, it ensures that both the debit and credit aspects of each transaction is posted and balanced in the ledger account. So, when we prepare the trial balance, it gives us different indication about the steps that we have already taken and also help us in moving forward to the next step. So, if there are some mistakes, we will move back to see where are the mistakes. If the trial balance agree, then we will move forward to record or to make the preparation of final accounts. So, trial balance in the whole system of bookkeeping occupies a very important place where it indicates the mistakes and it gives us the signal to move forward or to move backward. So, in this session, we have discussed that trial balance is a list of laser balances. It is prepared after closing the laser accounts as well as the cash book. And we prepare it to check the arithmetical accuracy of the records that we are maintaining from these days of recording transaction in journal, posting them in ledger, balancing them and finally we prepare a list with all the laser balances to check the arithmetical accuracy of the records. So, that arithmetical accuracy that is ensured by preparing the trial balance means the trial balance is agreed. It means that both the debit and the credit amounts of the trial balance are equal and that is known as the agreement of the trial balance. If the trial balance does not agree, it means there are some errors. So, the debit amount and the credit amount of the trial balance will not agree, will not be the same and it indicates that we have to move backward to check the errors. So, this is all about the preliminary concepts of trial balance and it's important. So, we will also discuss some other aspects of trial balance in our next video. Thank you.