Adjusted Trial Balance

Adjusted Trial Balance Definition

Adjusted Trial Balance of the company in the non-financial statement in which the list and the balances of the company’s all the accounts are presented after the adjusting journal entries are made at the year-end and those balances are then reported on respective financial statements.

In simple words, when accounts are prepared at the end of the accounting period, ledger balances are also required to be updated with relevant adjustments, which are results of the partial transaction, improper transactions, and transactions that were skipped. Such types of transactions are deposits, closing stocksClosing StocksClosing stock or inventory is the amount that a company still has on its hand at the end of a financial period. It may include products getting processed or are produced but not sold. Raw materials, work in progress, and final goods are all included on a broad more, depreciation, etc. Once all necessary adjustments are made, a new second trial balance is prepared to ensure that it is still balanced. This new trial balance is called the adjusted trial balance.

Its purpose is to be sure that the total amount of debit balanceDebit BalanceIn a General Ledger, when the total credit entries are less than the total number of debit entries, it refers to a debit balance. A debit balance is a net amount often calculated as debit minus credit in the General Ledger after recording every more in the general ledger is equal to the total amount of credit balanceCredit BalanceCredit Balance is the capital amount that a company owes to its customers & it is reflected on the right side of the General Ledger Account. Usually, Liability accounts, Revenue accounts, Equity Accounts, Contra-Expense & Contra-Asset accounts tend to have the credit balance. read more in the general ledger.

Adjusted Trial Balance

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For eg:
Source: Adjusted Trial Balance (

Entries in an Adjusted Trial Balance

#1 – Accrual of revenue that was earned but not yet recorded.

It arises when an asset is a sale, but the customer not yet billed for the same. Eg. Account receivableAccount ReceivableAccounts receivables refer to the amount due on the customers for the credit sales of the products or services made by the company to them. It appears as a current asset in the corporate balance more, accrued interest.

Accrued revenue A/C – Dr

Revenue A/C- Cr

#2 – Accrual of expenses that were incurred but not yet recorded.

It is an expense recorded in accounts before the payment is made. E.g., Interest payableInterest PayableInterest Payable is the amount of expense that has been incurred but not yet paid. It is a liability that appears on the company's balance more, salaries, and wages payable.

Expense A/C- Dr

Expense payable- Cr

#3 – Prepayments

PrepaymentPrepaymentPaying off an expense or debt obligation before the due date is referred to as prepayment. Companies frequently pay for expenses, goods, and services in advance to reduce their financial burden and gain monetary rewards. Prepaid bills, rent, salary, credit card bills, income tax, and sales tax are all examples of more is the setting of payment before its due date. Eg. Prepaid rent.

Prepaid expense A/C- Dr

Cash A/C- Cr

#4 – Depreciation

Depreciation is a non-cash expense that is identified to account for the deterioration of fixed assets to reflect the reduction in useful economic life.

Adjusted Trial Balance Example

To understand this better let us see the examples

Suppose a printing company name ACE Prints run a small business of printing, their trial balance as on 31st March’2018 is below:-

Adjusted Trial Balance

We get clear information from trial balance about debitDebitDebit is an entry in the books of accounts, which either increases the assets or decreases the liabilities. According to the double-entry system, the total debits should always be equal to the total more entries and credit entries. But there is some more information which is required for adjustment of trial balance.

  • The salary due to the employee as on 31st March’2018=$ 50,000
  • Rent is inclusive of refundable deposit of= $ 20,000

Now, the adjustments need to be done in the trial balance for the above details.

The below entry is done in the Salary account.

Example 1

Here, the adjustment will be made of $ 80,000.00 as the total salary payableSalary PayableSalary payable refers to the liability of the company towards its employees against the amount of salary of a period that became due but has not been paid yet to them by the company and it is shown in the balance of the company under the head more is $ 80,000.

The below entry is done in the Rent account.

Example 2

Here, the adjustment will be made of $ 50,000.00 as the rent deposit is $ 20,000, the rent payment will be $ 30,000.

The adjusted trial balance will be as follows:-

Adjusted Trial Balance 3

The adjustments are made as below:-

  • A rent deposit is taken into consideration.
  • An outstanding salary also included in it.

Hence, the trial balance made includes all considerable adjustments, and this is termed as adjustment trial balance.

How to Prepare Adjusted Trial Balance?

There are two methods for the preparation –


Difference Between Trial Balance and Adjusted Trial Balance

Adjusted Trial Balance Video


This article has been a guide to what is Adjusted Trial Balance? Here we discuss adjusted trial balance examples, its preparation, and purpose along with journal entries. You may learn more about accounting from the following articles –

Reader Interactions


  1. Shewaye says

    It is very useful and it’s clear. Thank you.

    • Dheeraj Vaidya says

      Thanks for your kind words!

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