An adjusted trial balance is:

Question

BlackTom AI · Accepted Answer

An adjusted trial balance is a working paper prepared after posting adjusting entries to verify that total debits still equal total credits and to provide the updated balances used to prepare the financial statements.

Relevant knowledge points:
- The accounting cycle: journalize transactions, post to ledger, prepare an unadjusted trial balance, make adjusting entries, prepare an adjusted trial balance, then prepare financial statements, close entries, and post-closing trial balance.
- Financial statements: (1) income statement, (2) statement of retained earnings/owner’s equity, (3) balance sheet, and (4) statement of cash flows.
- A trial balance (adjusted or unadjusted) is an internal control/working paper, not a financial statement.

Step-by-step reasoning:
1. Prepare the unadjusted trial balance by listing ledger account balances to confirm debits = credits.
2. Make adjusting entries (e.g., accruals, deferrals, depreciation) and post them to ledger accounts.
3. Prepare the adjusted trial balance by listing the updated balances and checking that total debits equal total credits. Example: unadjusted totals Debits = 50,000 and Credits = 50,000. Adjusting entries add Debits 1,000 and Credits 1,000 → adjusted totals Debits = 51,000 and Credits = 51,000, confirming equality.
4. Use the adjusted trial balance as the basis to prepare the four formal financial statements.

Why the correct answer is correct:
The adjusted trial balance is explicitly an accountant’s working paper used to ensure accuracy and to extract the figures for the formal financial statements. It itself is not presented as a financial statement to external users.

Why the other options are incorrect:
- "Only prepared when debits did not equal credits in the trial balance": Incorrect — it is prepared every period after adjustments, regardless of whether the unadjusted trial balance originally balanced.
- "The first step in the accounting cycle": Incorrect — earlier steps (identifying transactions, journalizing, posting) and preparing the unadjusted trial balance come first.
- "One of the four financial statements": Incorrect — the adjusted trial balance is a preparatory internal document; the four formal statements are separate.

Conclusion: The adjusted trial balance is an accountant’s working paper and not a financial statement, matching the provided correct answer.

An adjusted trial balance is:单项选择题

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