Your Guide to the Trial Balance – Balances, Movements, and Retained Earnings



The Trial Balance report provides a comprehensive summary of all accounts in your company over a selected period, including the opening balances, transactions within the period, and the resulting closing balances.

This report is essential for reviewing the company’s books and ensuring that accounts are balanced before generating other financial statements, such as the Balance Sheet or Income Statement. It enables you to:

• Review each account individually (e.g., expenses, revenues, assets…)
• Verify that accounting entries during the period were recorded correctly
• Detect any discrepancies or unusual entries

Despite its simplicity, the report requires a solid understanding of how each column works and how to interpret the data, especially in accounts that often show significant differences, such as Retained Earnings, which we explain in this guide.

How to Access the Report

To view the Trial Balance, click on Reports from the main menu, then select Trial Balance under the For Accountants section.



The report displays three key components for each account:

1. Opening Balance This represents the amount the account held at the beginning of the selected period.
2. Movements During the Period These include all entries posted to the account—whether from journal entries or other operations like invoices, expenses, or revenues. They are split into Debit and Credit depending on the nature of each entry.
3. Closing Balance This is calculated by adding the opening balance to the period's net movements, reflecting the account’s position at the end of the selected period.



• Select a suitable date range from the top of the page. You can choose from preset options like a fiscal quarter or define a custom period.
• You may also click on the currency name to change the report’s currency if needed.



How Retained Earnings are calculated in the Trial Balance report

Suppose you generate a trial balance report from 2025-01-01 to 2025-12-31. Wafeq will calculate the Retained Earnings beginning balance as follows:

• Sum All Revenue: Add the total from all journal entries under revenue accounts until December 31, 2024.

• Sum All Expenses: Add the total from all journal entries under expense accounts until December 31, 2024.

• Adjust for Retained Earnings Entries: Add any adjustments from journal entries specifically made against the Retained Earnings account, such as manual journals.

The beginning balance of Retained Earnings is then calculated by taking all revenues, subtracting the sum of all expenses, and adding any adjustments recorded directly to the Retained Earnings account.

Why Doesn’t the Retained Earnings Match Between the Trial Balance and the Balance Sheet?

When reviewing your financial reports, you may notice that the retained earnings shown in the Trial Balance report don't match the same account in the Balance Sheet.

This difference might seem confusing at first, but it simply reflects the distinct accounting purpose of each report.

Trial Balance Shows Results for a Specific Period Only

In the Trial Balance, account balances — including retained earnings — reflect:

• The balance is carried over from prior years.
• Transactions recorded within the selected period only.

This means that the retained earnings in the Trial Balance show the opening balance at the start of the selected period, before recognizing any current-year profits or losses.

The Balance Sheet Reflects the Financial Position up to a Specific Date

The Balance Sheet, on the other hand, shows the full account balances up to a particular date, including:

• Past retained earnings.
• plus or minus.
• Current period’s profit or loss.

As a result, retained earnings in the Balance Sheet reflect both historical and current-year performance — explaining the difference between the two reports.





How to Interpret This Difference as an Accountant or Auditor

• If you are reviewing historical retained earnings only: Use the retained earnings balance shown in the Trial Balance report.
• If you want to know the full retained earnings as of today: Refer to the retained earnings in the Balance Sheet, which includes results from the current period.

Exporting the Trial Balance

You can export the Trial Balance data by clicking the Export button within the report.

From the dropdown menu, select CSV or Excel to download the report in your preferred format.