Adjusted trial balance: once the unadjusted trial balance accounts have been reviewed and the proper adjusting entries prepared, the adjusting entries are posted to the general ledger. To verify that debits equal credits in the general ledger after the entries are posted, another trial balance is prepared. This trial balance is called an adjusted trial balance. The December 31 adjusted trial balance for the Guitar Lessons Corporation is shown below.
 

Guitar Lessons Corporation
Adjusted Trial Balance
December 31

Acct. No.

Account

Debits

Credits

111

Cash

$9,750

 

112

Notes Receivable

3,000

 

113

Accounts Receivable

1,200

 

114

Interest Receivable

20

 

115

Supplies

200

 

119

Prepaid Insurance

750

 

211

Accounts Payable

 

$1,350

213

Unearned Fees Revenue

 

625

214

Wages Payable

 

500

215

Income Taxes Payable

 

425

311

Common Stock

 

7,000

313

Retained Earnings

 

4,250

315

Dividends

150

 

411

Fees Revenue

 

3,375

412

Interest Revenue

 

20

511

Supplies Expense

400

 

517

Wages Expense

1,400

 

521

Insurance Expense

250

 

523

Income Taxes Expense

425

 

 

Totals

$17,545

$17,545

A comparison of the above adjusted trial balance to the unadjusted trial balance presented at the beginning of this chapter shows changes to twelve account balances (interest receivable, supplies, prepaid insurance, unearned fees revenue, wages payable, income taxes payable, fees revenue, interest revenue, supplies expense, wages expense, insurance expense, and income taxes expense). The changes to the twelve accounts were a direct result of the adjusting journal entries. Once the adjusted trial balance is completed, each account balance is reviewed again for reasonableness. If an account balance is reasonable, it is left unchanged. If an account balance is unreasonable, it is changed through another adjusting journal entry. The final results of this review and adjusting process are reasonable account balances that can be used in the preparation of financial statements.

 

 

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