1. The Adjusting Process
LO 4 – Preparing an Adjusted Trial Balance

2. Adjusted Trial Balance
LO 4
Adjusted Trial Balance
The purpose of the adjusted trial balance is to verify the equality of the total debit and credit balances before the financial statements are prepared.
The adjusted trial balance verifies the equality of the total debit and credit balances before the financial statements are prepared. If the adjusted trial balance does not balance, an error has occurred.

3. Unadjusted Trial Balance
LO 4
Unadjusted Trial Balance
Unadjusted Trial Balance for NetSolutions
NetSolutions
Unadjusted Trial Balance
December 31, 2011
This shows the unadjusted trial balance for NetSolutions. The unadjusted trial balance is prepared before the adjusting entries are recorded.

4. Adjusted Ledger LO 4 (continued)
This slide illustrates a portion of NetSolutions ledger after the adjusting entries have been posted. The adjusting entries are highlighted in blue. Only some of the ledger accounts are affected by adjusting entries.
(continued)

5. Ledger with Adjusting Entries
LO 3
Ledger with Adjusting Entries
Ledger with Adjusting Entries─ NetSolutions
This slide presents additional ledger accounts, with accounts affected by adjusting entries highlighted in blue. Typically, the description “adjusting” is written in the Item column of the ledger.
(continued)

6. Ledger with Adjusting Entries
LO 3
Ledger with Adjusting Entries
Ledger with Adjusting Entries─ NetSolutions
For some accounts, such as Depreciation Expense, the adjusting entry is the only entry in the account.
(continued)

7. Adjusted Ledger LO 4 Ledger with Adjusting Entries─ NetSolutions
This is the final page of the NetSolutions ledger, with the adjusting entries posted.
(concluded)

8. Adjusted Trial Balance
LO 4
Adjusted Trial Balance
Adjusted Trial Balance
This slide illustrates the adjusted trial balance. Accounts affected by adjusting entries are highlighted in blue. An adjusted trial balance is prepared after the adjusting entries have been posted to the ledger. The purpose of both the unadjusted and the adjusted trial balance is the same: to determine if the debits and credits in the ledger are equal. Just as in the unadjusted trial balance, even if the columns are equal, it is still possible to have made an error in the process of recording and posting adjusting entries to the ledger. Therefore, it’s important to look for unexpected results, such as an account having an abnormal balance or a balance being either greater or smaller then expected.