Adjusted Trial Balance

After the adjusting entries are posted, an adjusted trial balance is prepared. The adjusted trial balance verifies the equality of the total debit and credit balances before the financial statements are prepared. If the adjusted trial balance does not balance, an error has occurred. However, as discussed in Chapter 2, errors may occur even though the adjusted trial balance totals agree. For example, if an adjusting entry were omitted, the adjusted trial balance totals would still agree.

Exhibit 11 shows the adjusted trial balance for NetSolutions as of December 31, 2013. Chapter 4 discusses how financial statements, including a classified balance sheet, are prepared from an adjusted trial balance.

Source: Warren Carl S., Reeve James M., Duchac Jonathan (2013), Corporate Financial Accounting, South-Western College Pub; 12th edition.

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