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How are entries recorded in adjusted trial balance?
A report consists of balances of all general ledger balances for a period of time called trial balance. It includes all major items like assets, liabilities, revenues, equity, losses and gains. It shows debit balances and credit balances that are recorded in the general ledger at a particular time.
This format includes date, particulars/account description, debit balance and credit balance (balance recorded in respective field according to nature of account). Trial balance shows only account totals whereas general ledger shows all account transactions.
Sheets are divided into different types according to their nature (transaction recording called as journal entry, summarizing and categorizing those transactions called as ledgers and creating and classifying the ledgers called as trial balance).
If some adjusted entries are entered then it must reflect in trial balance.
The entries in the adjusted trial balance are recorded as follows −
Accrual of revenue
Asset is sold, but not yet billed (accounts receivable etc.)
In this scenario, accrued revenue account is debited and revenue account is credited.
|Accrued revenue A/c||Revenue A/c|
Before payment, expenses are recorded (salaries, wages etc.)
In this scenario, an expenses account is debited and expenses payable account is credited.
|Expenses A/c||Expenses payable A/c|
Payments made before the due date (prepaid rent etc.)
In this scenario, the prepaid expenses account is debited and the cash account is credited.
|Prepaid expense A/c||Cash A/c|
It is accounted for by fixed asset deterioration (useful economic life is reduced).
It is a non-cash expense.
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