Sam found his brother Brian\'s explanation of accounting principles helpful, but

Question

Sam found his brother Brian's explanation of accounting principles helpful, but he wanted to see what really went into creating accounting documents.

"I'm putting together a balance worksheet," Brian began. “It has five sections after the account names, and we always do the sections in the same order, working from left to right. I’ve just finished entering the balances of the general ledger accounts into the trial balance section of the worksheet.”

After making sure that the trial balance is accurate, Brian will prepare the (A)__________ section, followed by the (B)__________ section of the worksheet.

Explanation / Answer

After making sure that the trial balance is accurate, Brian will prepare the (A) Income Statement section, followed by the (B) Equity Statements and Balance Sheet section of the worksheet.

Steps that must be taken to create complete Trial balance worksheet:-

1. Ensure that all the transactions have been properly journalized and properly posted to Journal ledger.

2. Trial balance worksheet is prepared in Statement format whose basic presentation is given below:-

3. The first two columns are the account balances of the company after all transactions have been posted. These numbers come directly from the balances that appear in the general ledger. The second two columns show the adjustments that have been made to a few accounts.

4. After giving the impact of adjustments to unadjusted trial balance (for example, prepaid expenses, outstanding expenses etc.) , We have fully adjusted Trial Balance.

Account Titles Unadjusted Trial Balance (Debit and Credit Columns) Adjustments (Debit and Credit Columns) Adjusted Trial Balance (Debit and Credit Columns)

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