Unadjusted trial balance is the list of the general ledgers accounts balance (both balance sheet’s items and income statement’s items) for the specific accounting period before making any adjustment. In other words, before proceeding with an adjustment.

This statement is normally prepared in four columns. The adjusting entity will be made when the accountant or auditor reviews the accounting records.

Note that numbers adjustment is necessary to make accounting records true and fair review following entity’s accounting policies and accounting standards that entity complying with.

Once all adjustments are made to the unadjusted trial balance, we will have the adjusted trial balance. And this is the main reason that makes these two statements different.

It is important to note that the unadjusted trial balance is prepared in traditional bookkeeping. Now, most of the company use an accounting system where the system automatically creates the trial balance.

Explanation and Examples

There are many reasons why the trial balance is prepared. One of the main reasons to make this statement is to detect the error that might occur during accounting entry in the accounting ledger.

There is a number of reasons that required an accountant to adjust the company’s accounting ledgers.

For example, adjustment to correct over accrual of electricity expenses. Or correcting adjustment when the accountant noted that the debit balance and credit balance of trial balance are not reconciled due to the incorrect entries made into the general ledgers.

Another example is that an accountant might post salary expenses on the debit side for both the salary and cash/bank accounts. If this is the case, the trial balance will show the variance between the debit side and the credit side. And the accountant needs to back to confirm the problem, then making adjustments.

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Same as the adjusted trial balance, this statement shows all the closing account balances. It ranks from assets accounts, liabilities accounts, and follow by equity account, revenues account, and then expenses accounts.

Assets and expenses accounts are shown on the debit side, while liabilities, equities, and revenues accounts are down on the credit side.

Trial balance can detect only certain problems like difference amounts recording the same transaction and incorrectly recording debit or credit rule. Some mistakes like fail to records the transactions, remove or eliminate transactions on both sides, the trial balance could not detect.


The following is the example of unadjusted trial balance: