The following report shows an adjusted trial balance, where the initial, unadjusted balance for all accounts is located in the second column from the left, various adjusting entries are noted in the third column from the left, and the combined, net balance in each account is stated in the far right column. In the latter case, the adjusted trial balance is critically important - financial statements cannot be constructed without it. ![]() However, it is the source document if you are manually compiling financial statements. ![]() The completed adjusted trial balance worksheet is the useful tool for preparing financial statements such as Income Statement, Statement of Changes. The second application of the adjusted trial balance has fallen into disuse, since computerized accounting systems automatically construct financial statements. After adjusted entries are recorded to the debit and credit columns of the adjusted trial balance worksheet, the adjusted trial balance will be computed depending on the required adjusted entries. To be used to construct financial statements (specifically, the income statement and balance sheet construction of the statement of cash flows requires additional information). ![]() To verify that the total of the debit balances in all accounts equals the total of all credit balances in all accounts and The adjusted trial balance is not part of the financial statements - rather, it is an internal report that has two purposes:
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