What is a trial balance used for in accounting?

A trial balance is an essential accounting tool used to ensure that the accounting equation remains balanced. It lists the general ledger account balances of a company at a specific point in time and serves the purpose of verifying that the total debits equal the total credits. This balancing act is crucial because it helps identify any errors in the double-entry bookkeeping system, where every transaction affects at least two accounts.

When the debits and credits are not equal, it signals that there may be mistakes in the recording of transactions, which can lead to inaccurate financial statements. Thus, generating a trial balance is a fundamental step in the accounting process, enabling accountants to ensure the integrity of the financial data before proceeding to prepare a set of financial statements.

In contrast, the other options do not accurately represent the primary purpose of a trial balance. Calculating annual profits involves various computations beyond what a trial balance provides, preparing a trial for legal purposes pertains to different documentation and contexts in accounting or law, and analyzing employee performance is unrelated to the purpose of a trial balance.