Adjusted Trial Balance
An adjusted trial balance is a trial balance which is prepared after the preparation of adjusting entries. Adjusted trial balance contains balances of revenues and expenses along with those of assets, liabilities and equities. Adjusted trial balance can be used directly in the preparation of the statement of changes in stockholders' equity, income statement and the balance sheet. However it does not provide enough information for the preparation of the statement of cash flows.
The format of an adjusted trial balance is same as that of unadjusted trial balance.
The following adjusted trial balance was prepared after posting the adjusting entries of Company A to its general ledger and calculating new account balances:
|Adjusted Trial Balance|
|January 31, 20X0|
The totals of an adjusted trial balance must be equal. Any difference indicates that there is accounting error in the journal entries or in the ledger or in the calculations.
The next step of accounting cycle is the preparation of closing entries.
by Irfanullah Jan, ACCA and last modified on