Final answer:
The adjusted trial balance is prepared after all adjustments have been posted to the ledger, just before the financial statements are created, to ensure accuracy of the financial records.
Step-by-step explanation:
The adjusted trial balance is prepared after the accounting period closes and all of the journal entries for the period have been posted to the ledger accounts.
This is done prior to the creation of the financial statements. The purpose is to ensure that all adjustments, such as accrued expenses, prepaid expenses adjustments, and depreciation, have been made and are accurately reflected in the financial records. It is the last step in the accounting cycle before the financial statements are generated.
The adjusted trial balance includes all the account titles and balances of the company, including the adjustments, and its main purpose is to test the equality between total debits and credits after adjustments are made.