what goes into assets and liabilites in a adjusted trial balance
Definition Definition Statement that shows the ending balance of all the ledger accounts of a firm at the end of the accounting period. The trial balance is prepared after all the entries have been posted to the ledger accounts and assists in preparing the final accounts of a firm.
Expert Solution
Step 1
Firstly, we need to know the meaning of adjusted trial balance. After making all the year end journal ccounting entries in the accounts, the final listing of accounts that will appear on financial statements are termed as adjusted trial balance numbers.
Step 2
The following items are usually recorded in adjusted trial balance for Assets:-
1. Accrual of revenue earned but was not yet recorded- For eg. an asset is sold but not yet billed to custosmer, this has to be adjusted in revenue to show correct picture of accounts as accounts receivable.
2. Prepayments made- There are few regular payments that are setted & are regularly deducted from our bank a/cs, any such prepayment made for forthcoming period has to be adjusted back into our accounts to show the right picture. and hence included back as assets.
3. Changes in Inventory- Closing stock has to be adjusted as this figure is reported in assets in the Balance sheet.
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