Zemam Academy

How to produce a year-end trial balance

A year-end trial balance summarizes every account with its debit/credit balance, to confirm the books are balanced. In modern IFRS-compatible systems, the year-end trial balance is a “pre-closing” one: revenue and expenses keep their balances, and net profit flows to equity through the reports themselves — without a closing entry.

What is a trial balance?

A list of every account in your ledger with its balance in two columns: debit and credit. The golden rule: total debits must equal total credits. If they match, double-entry is balanced — the first step before you produce the income statement and balance sheet.

Producing the trial balance at year-end

1
Make sure every transaction is posted
Every entry must be posted up to the last day of the year — the trial balance is built from actual entries, so missing data means a missing balance.
2
Review your reconciliations
Reconcile bank, customers, suppliers, and inventory before producing the trial balance — so the balances it shows are real.
3
Produce the trial balance
The trial balance lists every account with its balance: opening balance + period movement + closing balance, in a debit and a credit column.
4
Confirm debits = credits
Total debits must exactly equal total credits. If they match, double-entry is balanced — the first confirmation your books are sound.
5
Check for any odd balance
An account that should be a debit showing as a credit? An unexpectedly large balance? Investigate and fix it before producing statements from it.
6
Produce the income statement & balance sheet from it
The trial balance is the foundation for the income statement (revenue − expenses) and the balance sheet (financial position).

The old method vs. the modern (IFRS) method

The difference isn't in the outcome — the financial statements are IFRS-compliant either way. The difference is the method: Zemam follows the cleaner, more accurate modern approach.

The old method

A manual closing entry

Revenue/expense at year-end: Zeroed by a closing entry
Net profit: Manually posted to retained earnings via an entry
Year-end trial balance: Post-closing (revenue/expense = zero)
The downside: An extra manual entry, and harder to get results for a partial period

The modern, IFRS-compatible method

What Zemam follows — no closing entry

Revenue/expense at year-end: Keeps its balance (a pre-closing trial balance)
Net profit: Appears in equity through the reports automatically
Year-end trial balance: A pre-closing trial balance
The advantage: More accurate, results for any period anytime, and a fully transparent ledger

Frequently asked questions

Why aren't revenue and expenses zeroed at year-end in Zemam?

Because Zemam follows the modern, IFRS-compatible method: there's no closing entry. Net profit flows to equity through the reports (income statement and balance sheet), which lets you get results for any period at any time without having “closed” the accounts with an entry.

So my books won't be “closed”?

The year-end trial balance is a “pre-closing” trial balance — which is correct and accepted, and produces IFRS-compliant statements. And you can still lock the period to block any retroactive edits.

Then how do I know the year's net profit?

From the income statement (revenue − expenses), and it appears automatically in equity within the balance sheet as a “Net Income / (Loss)” line.