A trial balance is a listing of the various accounting general ledger balances at the end of a specific accounting cycle. It is generally presented in a debit/credit format with debit balances appearing on the left and credit balances appearing on the right. In some cases, the trial balance may be displayed in a single column format with the credit balances presented as negative amounts.

One of the original purposes of trial balance presentations was to assure that the accounting records were, in fact, in balance (debits=credits) in a double entry accounting system. Debits and Credits are simply a way of attributing a plus or minus to various accounts within the general ledger. Debit amounts represent positive balances in Asset, Equity withdrawal, and Expense accounts. Credit amounts represent positive balances in Liability, Equity, and Revenue accounts.

Most accountants who prepare financial statements and tax returns for business and other entities need some form of trial balance software to automate the process of making various final adjustments and combining various accounts for the preparation of financial and tax related documents.

In most cases, the entity’s internal accounting system contains accounts in much greater detail than is desirable for external financial presentations and tax submissions. Trial balance software can make this data accumulation process more efficient and result in a total automation of this process in subsequent periods with well designed software.

In addition, if the entity maintains its internal accounting records on a different basis than it uses in the preparation of its tax returns, trial balance software provides for the necessary adjustments to the accounts, without disrupting the entity’s internal accounting.

Lastly, for CPAs and other financial professionals, a well designed software package can automate the conversion of an entity’s general ledger balances to professional appearing financial presentations, and in the case of TBFSwriter, provide an efficient means to consolidate separate entities and trial balances into a single financial entity for consolidated statements.

To review some of the most prominent trial balance software packages and additional information consider the following sources:

• CPAwriter, Inc.
• Caseware International
• CCH Prosystems Incorporated
• Creative Solutions (Thomson Reuters)

Governmental financial statement software is designed to convert governmental financial records and trial balances into financial statements that are in compliance with the reporting standards of the Governmental Accounting Standards Board (GASB). The current reporting model, GASB pronouncement 34, established the reporting format for all state and local units of government in the United States. This format consists of two basic reporting levels:

• “Entity-wide” reporting level reports the entity’s statement of position (net assets) and results of operations using the full accrual economic resources accounting method. This is very similar to the method of reporting used by business enterprises.


• “Fund level” reporting uses a modified accrual method for the governmental fund types and the full accrual method for the enterprise and internal service fund types.
  

The modified accrual method differs from the full accrual in that revenues are not recognized until they are available to meet current obligations. This generally means that revenues must be expected to be received within sixty days to be recognized during the current period. In addition, fixed assets are expensed when acquired and long-term debt is not recorded on the balance sheet. This results in the proceeds of long-term debt being treated as revenues in the year of receipt, and principal payments being expensed in year of payment.

Governmental financial statement software is used by governments and their professional advisors to convert their trial balances into these often complex financial presentations. Due to the complexity of this task, and limited number of users there are very few providers of this software.