Adjusted Trial Balance Meaning and Objectives

Meaning of adjusted trial balance 

An adjusted trial balance is combination of trial balance and adjustment. 

Even after the preparation of trial balance, there may remain some financial transactions whose adjustments are to be made accordingly.

Necessary adjustments of all those transactions are adjusted are made in adjusted trial balance. 

It is not part of the financial statements (financial statement does not include adjusted trial balance).

It is an internal report and working note.

It has two purposes:

To verify the total of the debit balances with credit balances.

To be used to prepare financial statements.

                                                            Adjusted Trail Balance

Part 1: It is the unadjusted trial balance part.

Part 2: It is the adjusting entries part; to understand properly, journalize the adjustment.

Part 3: It is the adjusted trial balance part. It is the total of trial balance and adjustment.

Procedure of adjusted trial balance

Step 1: Write debit balance of ledgers in debit side and credit balance of ledgers in credit side.

Step 2: Write adjustment entries two times i.e. one entry in debit side and another entry in credit side.

Step 3: Now, unadjusted trial balance and adjustments are added or subtracted to adjusted trial balance.

Step 4: Finally, both debit and credit sides are added to find out equal.

          Here, debit and debit = add Dr 100 + Dr 80   = Dr 180

          Credit and credit          = add Cr 50 + Cr 40      = Cr 90

          Debit and credit           = write more amount as debit or credit Dr 80 and Cr 30 = Dr 50

          Credit and debit           = write more amount as debit or credit Cr 70 and Dr 40 = Cr 30

Objectives of adjusted trial balance

The basic objective of adjusted trial balance is to provide necessary information to prepare financial statement. Other major objectives are as follows:

·          To check arithmetical accuracy of the transactions.

·          To record adjustment entries in the financial statement.

·          To provide base for final account.

·          To record reaming additional information after preparing trial balance. 

###########

Click on link for YouTube videos

ACCOUNTING EQUATION http://tiny.cc/c89jkz

BASIC JOURNAL ENTRIES IN NEPALI http://tiny.cc/uaakkz

BASIC JOURNAL ENTRIES http://tiny.cc/8aakkz

JOURNAL ENTRY AND LEDGER http://tiny.cc/caakkz

LEDGER http://tiny.cc/haakkz

SUBSIDIARY BOOK http://tiny.cc/399jkz

CASH BOOK http://tiny.cc/889jkz

TRIAL BALANCE & ADJUSTED TRIAL BALANCE http://tiny.cc/c59jkz

BANK RECONCILIATION STATEMENT (BRS) http://tiny.cc/q59jkz

DEPRECIATION http://tiny.cc/ugakkz

FINAL ACCOUNT: CLASS 11 http://tiny.cc/y89jkz

ADJUSTMENT IN FINAL ACCOUNT http://tiny.cc/keakkz

CAPITAL AND REVENUE http://tiny.cc/peakkz

SINGLE ENTRY SYSTEM http://tiny.cc/n19jkz

NON-PROFIT ORGANIZATION (NON-TRADING CONCERN http://tiny.cc/j09jkz

GOVERNMENT ACCOUNTING http://tiny.cc/hcakkz

GOSWARA VOUCHER (JOURNAL VOUCHER) http://tiny.cc/hcakkz

###########

***********

Thank you for investing your time.

Please comment on article.

You can help me by sharing this article at your social media platform.

Jay Google, Jay YouTube, Jay Social Media

जय गूगल, जय युट्युब, जय सोशल मीडिया