How to Prepare an Adjusted Trial Balance for Your Business

An adjusted trial balance is an internal document that summarizes all of the current balances available in general ledger accounting. TheMotleyFool AboutTheBlueprint ReviewMethodology AdvertiserDisclosure Wemayreceivecompensationfromsomepartnersandadvertiserswhoseproductsappearhere.That’showwemakemoney.Compensationmayimpactwhereproductsareplacedonoursite,buteditorialopinions,scores,andreviewsareindependentfromtheadvertisingsideofTheBlueprintandourobjectivityisanintegralpartofwhoweare.Ourcommitmenttoyouiscompletehonesty:wewillneverallowadvertiserstoinfluenceouropinionofproductsthatappearonthissite. Enteryouremailaddress: Search OurTopPicks Accounting AccountEdgePro AccountEdgeProhasalltheaccountingfeaturesagrowingbusinessneeds,combiningthereliabilityofadesktopapplicationwiththeflexibilityofamobileappforthoseneedingon-the-goaccess. ApplicantTracking ZohoRecruit ZohoRecruitcombinesarobustfeaturesetwithanintuitiveuserinterfaceandaffordablepricingtospeedupandsimplifytherecruitmentprocess. 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Accounting Construction COVID-19 EmailMarketing FieldService HumanResources ITSecurity ITSM Marketing ProjectManagement RealEstate RemoteWork SmallBusiness WomeninBusiness Searchforsoftwareandbusinesstopics: AdvertiserDisclosure Wemayreceivecompensationfromsomepartnersandadvertiserswhoseproductsappearhere.That’showwemakemoney.Compensationmayimpactwhereproductsareplacedonoursite,buteditorialopinions,scores,andreviewsareindependentfromtheadvertisingsideofTheBlueprintandourobjectivityisanintegralpartofwhoweare.Ourcommitmenttoyouiscompletehonesty:wewillneverallowadvertiserstoinfluenceouropinionofproductsthatappearonthissite. PreparinganAdjustedTrialBalance:AGuide Designedtoprovidetheinformationneededtocreateclosingentries,we’llguideyouthroughthestepsofcreatinganadjustedtrialbalance. MaryGirsch-Bock AccountingSpecialist Wemayreceivecompensationfrompartnersandadvertiserswhoseproductsappearhere.Compensationmayimpactwhereproductsareplacedonoursite,buteditorialopinions,scores,andreviewsareindependentfrom,andneverinfluencedby,anyadvertiserorpartner. Updated September22,2020 SaveasPDF Anadjustedtrialbalanceisaninternaldocumentthatsummarizesallofthecurrentbalancesavailableingeneralledgeraccounting.Theadjustedtrialbalanceispreparedtoshowupdatedbalancesafteradjustingentrieshavebeenmade.We’llexplainmoreaboutwhatanadjustedtrialbalanceis,andwhatthedifferenceisbetweenatrialbalanceandanadjustedtrialbalance.Overview:Whatisanadjustedtrialbalanceinaccounting?Anadjustedtrialbalanceiscreatedafteralladjustingentrieshavebeenpostedintotheappropriategeneralledgeraccount.Theadjustedtrialbalanceiscompletedtoensurethattheperiodendingfinancialstatementswillbeaccurateandinbalance.Inaddition,anadjustedtrialbalanceisusedtoprepareclosingentries.HowtoprepareanadjustedtrialbalancePreparinganadjustedtrialbalanceisthesixthstepintheaccountingcycle.Anadjustedtrialbalanceispreparedbycreatingaseriesofjournalentriesthataredesignedtoaccountforanytransactionsthathavenotyetbeencompleted.Theseitemsincludepayrollexpenses,prepaidexpenses,anddepreciationexpenses.Herearethestepsusedtoprepareanadjustedtrialbalance:Runanunadjustedtrialbalance.Thisprovidesaninitialsummaryofyourgeneralledgeraccountspriortoenteringanyadjustingentries.Makeanyadjustingentriesthatareneeded.Adjustingentriescanincludeadjustmentsforprepayments,interestanddepreciationexpense,andpayrollaccruals.Runtheadjustedtrialbalance.Youcanensurethattheentrieshavepostedcorrectlybycomparingtheinitialtrialbalancetotalswiththeadjustedtrialbalancetotals.ExampleofanadjustedtrialbalanceTounderstandwhatanadjustedtrialbalanceis,wefirsthavetoviewanunadjustedtrialbalanceaswellasthenecessaryjournalentriestocompleteinordertoprepareanadjustedtrialbalance.Step1:Runanunadjustedtrialbalance Account Debit Credit Cash 10,000 AccountsReceivable 7,000 PrepaidRent 3,100 Inventory 15,000 AccumulatedDepreciation 5,500 AccountsPayable 10,000 NotesPayable 3,000 CommonStock 10,000 Revenue 19,100 PayrollExpense 6,000 RentExpense 3,000 UtilitiesExpense 1,000 DepreciationExpense 2,500 TOTALS 47,600 47,600 Theabovetrialbalanceisacurrentsummaryofallofyourgeneralledgeraccountsbeforeanyadjustingentriesaremade.Debitsandcreditsshouldalwaysmatchinatrialbalance.Remembernottoconfuseadjustingentrieswithclosingentries.Closingentriesarecompletedaftertheadjustedtrialbalanceiscompleted.Step2:Enteradjustingjournalentries Account Debit Credit RentExpense 700 PrepaidRent 700 DepreciationExpense 300 AccumulatedDepreciation 300 Theabovejournalentriesweremadeinordertoaccountfordepreciationexpensesandprepaidrent.Step3:Runanadjustedtrialbalance Account Debit Credit Cash 10,000 AccountsReceivable 7,000 PrepaidRent 2,400 Inventory 15,000 AccumulatedDepreciation 5,800 AccountsPayable 10,000 NotesPayable 3,000 CommonStock 10,000 Revenue 19,100 PayrollExpense 6,000 RentExpense 3,700 UtilitiesExpense 1,000 DepreciationExpense 2,800 TOTALS 47,900 47,900 Asyoucanseebytheadjustedtrialbalanceexampleabove,someoftheaccounttotalshavenowbeenupdated.Inthisexample,theadjustedtrialbalanceshowsthechangesthataffectedboththerentanddepreciationaccounts.Forinstance,weexpensedrentforthemonth,soweneededtoreducetheprepaidrentamount.Fordepreciation,depreciationexpenseincreased,whileaccumulateddepreciationincreasedaswell.Inaddition,youradjustedtrialbalanceisusedtoprepareyourclosingentries,whichisthenextstepintheaccountingcycle. Adjustedtrialbalancefrequentlyaskedquestions Whatisthepurposeofanadjustedtrialbalance? Anadjustedtrialbalanceprovidesyouwiththesummarytotalsofallofyourgeneralledgeraccountsafteradjustingentrieshavebeenmade. Whatrelationdoesanadjustedtrialbalancehavetothegeneralledger? Boththeunadjustedandtheadjustedtrialbalancearelistingsoftheendingbalancesofallofyourgeneralledgeraccounts. Whatentriesaretypicallymadetotheadjustedtrialbalance? Adjustingentriestypicallyincludepayrollaccruals,prepaymentadjustments,anddepreciationexpensesthathavenotyetbeenrecorded. BestaccountingsoftwareforpreparinganadjustedtrialbalanceWhileyoucancreateanadjustingtrialbalancemanually,orbyusingspreadsheetsoftware,it’sfareasiertodosowhenusingaccountingsoftware.HerearesomeofTheBlueprint’stoppicksforcreatinganadjustedtrialbalance.Formoreabouttheseandotheraccountingsoftwareoptions,checkoutouraccountingsoftwarereviews.1.AccountEdgeProAccountEdgeProisdesignedforsmallandgrowingbusinesses.Itoffersbothon-siteinstallationaswellascloudaccess,andisagoodfitforgrowingbusinessesthatarelookingforaccountingsoftwarethatcangrowwiththem.AccountEdgeProoffersaneasilynavigateduserinterface.AccountEdgeProincludesanexcellentselectionoffinancialreportsincludingatrialbalancesummaryreportandatrialbalancedetailreportthatprovidesdetailsonallgeneralledgeraccountscurrentlybeingused.AccountEdgePropricingvaries,dependingonwhetheryouchoosetheon-premiseapplicationoroptforcloudconnectivity.AccountEdgePro’son-siteapplicationchargesaone-timefeeof$399,whilethecloudapplication,PriorityZoom,startsat$50/monthforupto5users,withadditionallicenses$50/month.2.QuickBooksDesktopQuickBooksDesktopwasoneofthefirstaccountingsoftwareapplicationstoreplacecommonaccountingtermssuchasaccountspayableandaccountsreceivablewithmorefamiliartermssuchasbillsandmoneyowed.Asanaddedbonus,QuickBooksPremierandEnterprisealsoincludeindustry-specificfeaturesdesignedfornonprofits,manufacturing,orretailbusinesses.QuickBooksDesktopfeaturesarecategorizedincentersforeasiersystemnavigation.QuickBooksDesktopincludesexcellentreportingandreportcustomizationoptionsandincludesbothasummaryanddetailedtrialbalanceaswellasaworkingtrialbalance,whichshowsbeginningtotals,adjustments,andendingbalances.QuickBooksDesktopoffersthreeplans;Pro,whichis$299.95/year,Premier,at$499.95/year,andEnterpriseat$849.10/year.3.Sage50cloudaccountingAgoodchoiceforsmallandgrowingbusinesses,Sage50cloudaccountingoffersalonglistoffeaturesthatbusinessownerswillappreciate,suchascompletecustomerandvendormanagement,integrationwithMicrosoft365,andsolidinventorymanagement.Sage50cloudaccountingoffersthreeplans,makingiteasytoscaleuptothenextplanifnecessary.Sage50cloudaccountingoffersacomprehensivecompanyoverviewdashboard.Sage50cloudaccountingoffersbothasummaryanddetailedtrialbalancereport,alongwithacomparativetrialbalancethatallowsyoutocomparetrialbalancetotalsfortwoperiods.Therearealsonetchangesfortheperiodtrialbalancereportthatprovidesagoodviewofallchangesmadeduringanaccountingperiod.Multi-periodanddepartmentaltrialbalancereportsareavailableaswell.Sage50cloudaccountingoffersthreeplans;Pro,whichis$278.98annually,Premium,whichruns$431.95annually,andQuantum,withpricingavailablefromSage.TheadjustedtrialbalanceiskeytoaccuratefinancialstatementsBeforepostinganyclosingentries,youwanttomakesurethatyourtrialbalancereflectsthemostaccurateinformationpossible.Boththeunadjustedtrialbalanceandtheadjustedtrialbalanceplayanimportantroleinensuringthatallofyouraccountsareinbalanceandfinancialstatementswillreflectthemostaccuratetotals. TheTop25TaxDeductionsYourBusinessCanTake—And5YouCan’t Areyoupayingmoreintaxesthanyouneedto?Everydollarmakesadifference,andyoucansavemoreofthembytakingALLthetaxdeductionsavailabletoyourbusiness.Inthis12-pagereport,we'veoutlinedthetop25businesstaxdeductionsyoucouldbetaking(and5towatchoutfor)!Enteryouremailtogetthisfreereport,“TheTop25TaxDeductionsYourBusinessCanTake–And5YouCan’t.” Enteryouremailaddress: GetFreeReport Therewasanerrorsigningup.Pleaseverifythattheemailisvalidandtryagain. Therewasaproblemconnecting.Pleasetryagain. Easilysavethisreporttoyourcomputerorprintitatanytime. TheTop25BusinessTaxDeductions TheMotleyFoolhasaDisclosurePolicy.TheAuthorand/orTheMotleyFoolmayhaveaninterestincompaniesmentioned. OurTopAccountingSoftwarePartners FreshBooks VisitFreshBooks Get60%offmostFreshBooksplansforthefirst6monthsforalimitedtime.TryFreshBooksforfreetodayandseeforyourselfwhywenamedittheEasiesttoUseaccountingsoftware! 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Easilysavethisreporttoyourcomputerorprintitatanytime. TheTop25BusinessTaxDeductions TheBestAccountingSoftwareof2021 Accountingsoftwarehelpsmanagepayableandreceivableaccounts,generalledgers,payrollandotheraccountingactivities. Checkoutthebestreviews» AccountingArticles 10StepstoCreatinganInvoiceinQuickBooksOnline OneofthemostusedfeaturesonQuickBooksOnlineistheinvoicetool.We'llshowyouhowtocreateaninvoice,makerecurringinvoices,sendreminders,andmore. ByMaryGirsch-Bock HowtoHandleanNSFCheck Acommonmethodcustomersusetopayiswithacheck,butyouruntheriskofreceivinganNSFcheck.HerearefivethingsyoudoafteracceptinganNSFcheck. ByMaryGirsch-Bock HowtoCreateaCashFlowProjection Acashflowprojectionestimatestheamountofcashthatisexpectedtoflowinandoutofthebusiness.Learnhowtocreateacashflowprojectioninsevensteps. ByMaryGirsch-Bock SIGNUPFORTHEBLUEPRINT'SNEWSLETTER Gettrustworthyadvicetohelpyourbusinessgrow. 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