Question

What is the difference between an unadjusted trial balance and an adjusted trial balance?

1) The unadjusted trial balance includes all accounts and their balances, while the adjusted trial balance only includes the accounts affected by adjusting entries.
2) The unadjusted trial balance is prepared before adjusting entries are made, while the adjusted trial balance is prepared after adjusting entries are made.
3) The unadjusted trial balance is used to identify errors and make adjusting entries, while the adjusted trial balance is used to prepare financial statements.
4) The unadjusted trial balance is a permanent record, while the adjusted trial balance is temporary and used for internal purposes.

Answer 1

An unadjusted trial balance includes all accounts and their balances and is prepared before adjusting entries. Adjusted trial balance only includes the accounts affected by adjusting entries and is prepared after adjusting entries.

Step-by-step explanation:

The difference between an unadjusted trial balance and an adjusted trial balance lies in the timing and content of preparation.

1. The unadjusted trial balance includes all accounts and their balances, while the adjusted trial balance only includes the accounts affected by adjusting entries.
2. The unadjusted trial balance is prepared before adjusting entries are made, while the adjusted trial balance is prepared after adjusting entries are made.
3. The unadjusted trial balance is used to identify errors and make adjusting entries, while the adjusted trial balance is used to prepare financial statements.
4. The unadjusted trial balance is a permanent record, while the adjusted trial balance is temporary and used for internal purposes.