Trial balance prepared after adjusting entries so statement preparation starts from period-correct balances.
An adjusted trial balance is the trial balance prepared after period-end adjusting entries have been posted. It lists ledger accounts and balances in debit and credit columns using amounts that should now be ready for financial statement preparation.
The adjusted trial balance is the bridge between raw ledger balances and formal statements. It shows whether accruals, prepaids, depreciation, and other timing adjustments have actually been incorporated before the income statement and balance sheet are finalized.
Accountants usually start with an unadjusted trial balance, review period-end items, post adjusting entries, and then regenerate the report. The adjusted trial balance should still have total debits equal total credits, but now the balances reflect the correct reporting period more faithfully.
It is still not the final post-closing report. Temporary revenue and expense accounts usually remain on the adjusted trial balance until closing entries are posted.
After recording depreciation and an accrued wage expense, a business may have an adjusted trial balance like this:
| Account | Debit | Credit |
|---|---|---|
| Cash | 18,000 | |
| Accounts Receivable | 7,500 | |
| Equipment | 24,000 | |
| Accumulated Depreciation | 2,000 | |
| Wages Payable | 3,000 | |
| Owner’s Equity | 20,000 | |
| Service Revenue | 29,500 | |
| Wage Expense | 3,000 | |
| Depreciation Expense | 2,000 |
The added expense and liability balances show that period-end adjustments have already been reflected.
An adjusted trial balance is not the same as a post-closing trial balance. It also is not proof that every estimate or classification is correct. Debits and credits can balance even when management assumptions or account choices need more review.