A trial balance is something a company calculates at the end of an accounting period prior to making adjusting entries. An unadjusted trial balance is normally created on a 10-column worksheet and is used to make adjusting entries, close the books and create financial statements. An unadjusted trial balance is prepared by transferring the accounts and amounts from a company’s general ledger onto the worksheet.
Things You'll Need
- General ledger
- 10-column worksheet
Obtain the general ledger. A general ledger is the place companies track all accounting transactions. The general ledger is made up of all the various accounts a business uses. Transactions are posted into the general ledger as a combination of debits and credits. Every time a transaction occurs, a journal entry is made.
Prepare a worksheet. A 10-column worksheet is needed and used typically when creating an unadjusted trial balance. The worksheet is labeled “Trial Balance” and is dated as of the date it is created.
List all of the accounts. Look at the general ledger and begin listing all accounts in it onto the worksheet. The account names are listed on the far left-hand side of the worksheet. They are listed in order beginning with assets, liabilities, equities, revenues and finally expenses.
Transfer the balances. For every account listed on the worksheet, list the balance in the account. Asset and expense accounts have debit balances; while liabilities, equities and revenues have credit balances. The first two columns on the worksheet are labeled debit then credit. These columns are designated for the unadjusted trial balance. When transferring the amounts, be sure to place them in the correct columns. For example, if the account has a debit balance in the general ledger, the amount must be placed in the debit column.
Add up the columns. Add all amounts in the debit column and place the total at the bottom of the list under the debit column. Add all amounts in the credit column and place that total at the bottom of the list under the credit column.
Verify balances. An adjusted trial balance is a complete listing of all accounts and balances as of the date the report is created. The total amount of debits must equal the total amount of credits. When the two bottom amounts are verified, this means they are equal. A set of double lines is placed under both amounts to represent that the unadjusted trial balance is in balance.