Week 2 DQ 4 When is the trial balance prepared? What does the trial balance tell you?

What does the trial balance not tell you? How would you explain the purpose of the adjusted trial balance? The trial balance is prepared when the ledger accounts have been balanced at the end of the specific accounting period. Debits are listed on the left side of the “T” and credits are listed on the right. Both sides of the trail balance must balance. The trail balance tells me that the debits (left) and the credits (right) match or that they balance. The trail balance also might identify errors that could have been made when posting and journali ing. The trail balance is also a precursor to preparing financial statements. The trail balance does not tell you that ledger is correct. !ome transactions may not have been posted" been posted repeatedly" amounts could be incorrect" or some posts may be incorrect amounts therefore inaccuracy can occur and not be reali ed. The purpose of the adjusted trail balance is to ma#e sure that the total amount of debit (left) balances in the general ledger e$uals the total amount of credit (right) balances. %fter the accounting period is closed adjustments are made to the general ledger accounts over a specific time period therefore reflecting on the adjusted trial balance. References: % ver#amp" &.B. ('())). Accounting basics. %ccounting *oach" ++*. ,etrieved from http-..blog.accountingcoach.com.debt/ratio. 0immel" 1. D." 2eygandt" 3. 3." 4 0ieso" D. 5. ('())). Financial accounting: Tools for business decision making (6th ed.). &obo#en" 73- 3ohn 2iley 4 !ons.

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