Question

multiple choice question
explain the difference between the unadjusted and the adjusted trial balance.

the adjusted trial balance contains only the accounts which were adjusted. the unadjusted trial balance contains all of the remaining accounts.
the unadjusted trial balance is more up to date than the adjusted trial balance.
the unadjusted trial balance is more accurate and should be used to prepare financial statements.
the adjusted trial balance is prepared after adjusting entries have been recorded and posted.

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Explanation:

• The first option is incorrect: both trial balances include all accounts, not split adjusted/remaining.
• The second option is incorrect: the adjusted trial balance is more up-to-date, as it reflects period-end adjustments.
• The third option is incorrect: the adjusted trial balance is accurate and used for financial statements, as it corrects accruals, deferrals, etc.
• The correct option defines the core difference: the adjusted trial balance is created after adjusting journal entries are recorded and posted to ledgers, updating account balances to match accrual accounting standards.

Answer:

The adjusted trial balance is prepared after adjusting entries have been recorded and posted.