Adjusted Trial Balance

While final accounts are being prepared at the end of an accounting period, ledger balances are also required to be updated with relevant adjustments which are a result of partial, improper and transactions which were skipped. Examples of such transactions are depreciation, closing stock, accruals, deposits etc. Once identified adjustments are done in the ledger accounts to bring them to their appropriate levels.

Once all the necessary adjustments are absorbed a new second trial balance is prepared to ensure that it is still balanced. This new trial balance is called adjusted trial balance. All ledger balances and their respective debit and credit balances are listed within this and are further used to prepare the financial statements of a company.

 

Lite© – Learning Initiative Through Example(s)

Suppose Unreal Pvt. Ltd. runs a small business and their trial balance as on March 31, 2014 is as follows:

Trial balance before adjustments

The following additional information is also to be incorporated in the above trial balance thereafter an adjusted trial balance is to be furnished.

  • Salary due to employees as on 31 March 2014 is 4,000
  • Rent includes a refundable deposit of 15,000

 

Following entries will be done in their respective ledger accounts

Salary and rent account adjustment

 

Adjusted Trial Balance

Adjusted Trial Balance

Hence the trial balance thus made is the one which includes all considerable adjustments and can be termed as adjusted trial balance