An adjusted trial balance is a list of accounts and their balances at the end of an accounting period after the adjusting journal entries have been posted. Unadjusted Trial Balance Accounting Simplified. The unadjusted trial balance lists the account balances in the general ledger before adjusting entries are made in the accounting cycle. NANDURI COMPANY Worksheet For the Month Ended June 30 2014 Trial Balance from ACCOUNTING 100 at Strayer. The unadjusted trial balance is used to verify the balance of debits and credits, and to review the balances of each account in preparation of the adjusting entries in the next step in the accounting cycle. Companies will generally prepare the trial balance sheet on a monthly or quarterly basis, in addition to year end, to ensure that the accounts balance and adjusting entries are made timely throughout the year. A sample unadjusted trial balance sheet appears below for Sunny Sunglasses Shop for January 2. Sunny Sunglasses Shop. Unadjusted Trial Balance. January 3. 1, 2. 01. Unadjusted Trial Balance. The unadjusted trial balance shows a listing of each account after one month of business activity in January of 2. Notice the asset and expense accounts appear on the left side as debits, and the liabilities, owners equity, and revenue accounts appear on the right side as credits. This format ensures that each side balances with the other according to the accounting equation. Sales and expenses are reported on the income statement. Income Statement accounts are called nominal or temporary accounts because they are closed to the permanent balance sheet accounts. The income statement accounts are reported for the specific period, such as a month, quarter, or year, and then closed to assets, liabilities, or owners equity on the balance sheet. Closing entries occur at the end of a reporting period to start the income statement balances at zero for the next period. We discuss closing entries later in the accounting cycle. Real or permanent accounts are accounts with ongoing balances and appear on the balance sheet as assets, liabilities, and owners equity. Examples are cash, accounts receivable, loans payable, and owners equity. Retained earnings represent the accumulated net earnings and losses of the business. Since this is the first year of operations for Sunny Sunglasses Shop, the balance is zero. Sunny will close net income to retained earnings in the closing entry process. Purpose of the Unadjusted Trial Balance Worksheet. The unadjusted trial balance serves two main purposes It verifies the equality of the debits and credits. It provides a listing of each account balance to facilitate the adjusting entry process. From Unadjusted Trial Balance to the Fifth Step in the Accounting Cycle Adjusting Entries. Back to the Online Accounting Main Page. Back to the Accounting Cycle Main Page. Back to the Accounting Terms Main Page. Online Accounting and Business Accounting Home Page.
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