What is the Adjusted Trial Balance?  

An adjusted trial balance is a trial balance to which the adjusting entries have been added. The adjusted trial balance is generally completed separately from the original trial balance as a check to make certain the adjusting entries made comply with the accounting equation. 

How to Create an Adjusted Trial Balance

Now that we have done the following steps for the transaction: 

• journalizing 
• posting 
• pre-adjusting or unadjusted trial balance,
• posting the adjustments, 

The next step is to adjusting the trial balance.

This is the second trial balance that we've done. But, this is done after the the adjusting entries have been recorded and posted to the ledger. It makes certain that the adjustments work with the accounting cycle. That is, it makes certain that our debits and our credits are equal and comply with the accounting equation. 

We don't look at the individual journal entries. Instead, we look directly at the T tables. We need to go through and find the account balances for every single one of these. 

Note: the Cash T table can be tricky. With cash, you're gonna add up all the debits, including the beginning balance, add up all the credits, and subtract the two. 

If your cash is positive, it will go on the the debit side because that's our normal side and that's also the side that has the larger sum of the debits.

Note: I still haven't touched retained earnings t-table yet. I'm not going to touch that until the kind of very end. 

Now tI have all these end balances. I need to start putting these into the trial balance. Go in whatever order with the accounts. It's always going to come out the same as long as your debits and your credits are the same. 

Once this is done, I add up all the debits from the top to the bottom only in the debit column.Then, if I do the same thing to the credits, it's going to equal the debits. 

So I know my adjusted trial balance is right because my debits and my credits are equal.

 So, now I can move on to the next step, which is going to be the financial statements. 

Related Topics

• What is the Accounting Cycle? – Financial Accounting
• Accrual vs Cash Basis Accounting – Financial Accounting
• What are Accounting Adjustments? – Financial Accounting
• What is an Adjusted Trial Balance – Financial Accounting
• Completing the Accounting Cycle - Creating Financial Statements
• What is the Trial Balance Closing Process – Financial Accounting
• Example of the Closing Process