What is the primary purpose of preparing a trial balance?

The primary purpose of preparing a trial balance is to ensure that the accounts are balanced. This involves listing all the account balances from the general ledger to verify that the total debits equal the total credits. The trial balance serves as a foundational step in the accounting process, helping to identify any discrepancies or errors in the ledger entries before moving forward with the preparation of financial statements.

By confirming that debits and credits are equal, the trial balance helps maintain the integrity of the accounting records. If the trial balance does not balance, it signals that there may be errors in recording transactions, which will need to be investigated and corrected.

While evaluating net income or loss, tracking revenue streams, and closing the books are important aspects of accounting, they occur at different stages of the accounting process and are not the primary purpose of the trial balance. The trial balance is specifically a tool used to check for accuracy in the accounts and ensure that the bookkeeping is correctly aligned before further financial analysis is performed.