Final answer:
The adjusted trial balance for Wilson Trucking Company at December 31 includes updated account balances after end-of-period adjustments. It shows equality between total debits and credits, ensuring accurate financial statements can be prepared.
Step-by-step explanation:
The complete adjusted trial balance for Wilson Trucking Company at December 31 is a financial report that lists all the account titles and balances of the company after all necessary year-end adjustments have been made. This includes the ending balances in all asset, liability, equity, revenue, and expense accounts after accounting for things such as depreciation, accruals, and prepayments that have occurred during the accounting period.
To construct an adjusted trial balance, one must follow these steps:
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- Start with the unadjusted trial balance.
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- Review and post any adjusting entries required to update account balances for the period's activities.
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- Ensure that the total debits equal the total credits after adjustments have been made, as the trial balance must balance to prove the accounting entries are accurate.
This is an important step in the accounting cycle as it verifies the equality of debits and credits after adjustments, serving as a basis for preparing the financial statements.