Trial balance is not the financial statements and it is could not be submitted to the key end users instead of financial statements. This statement is prepared for the purpose of drafting financial statements, reviewing errors, check mathematically correctness of entry, and so on.
Normally at the end of the period, the accountant might need to prepare the financial statements and other related financial reports for management.
Accountant need to make sure that the ledgers are correctly enters according to the accounting equation so that the financial statements are mathematically correct. This is the reason why accountant need to prepare trial balance.
In short, trial balance is prepared for the purpose of identifying and detecting errors that enter in general ledgers. It is also use as the working papers for accountant and auditors in drafting financial statements.
As mentioned above, if the debit side is over the credit side, that mean the accounting entry is not mathematically correct. In this case, accountant need to double check his accounting entries and classification.
Maybe the amount of the specific transaction is not equally enter between debit side and credit side. Or maybe the classification is not correctly classified respect to accounting equation.
It is importance to note that trial balance could not detect all the error that make during the entry. For example, the elimination of entity both in debit and credit still make trial balance reconcile.
Trial balance is prepare in four or five column and list down all closing general ledgers by ranging the ledgers from assets account to liabilities and equity. Income statements account like revenues and expenses are listed down subsequently after equity.
This is to make sure that preparer of financial statements is easy to identify which items are belong to assets, liabilities, equity, revenues and expenses.
The main important element that should include in this statement is the account name, reference, balance before adjustment, adjusting entry, and balance after adjustments.
Sometimes, this statement is print out along with the five financial statements for management purposes. But it is generally not