As Figure 5-1 illustrates, if you choose not to record adjusting journal entries, you prepare a trial balance
called an Unadjusted Trial Balance
, which does not display any adjustments.
What you can achieve: The trial balance
plays a crucial role in internal reporting because it's the connector between the underlying detailed data (ledgers, subledgers, transactions) and end reporting.
The calculation of financial ratios is extremely simple with trial balance
software, and it aids in the preparation of financial statements.
By providing a standardized way to link transactions, documents, ledgers, trial balance
, and internal or external end reports, XBRL GL enables automated validation and reconciliation processes that are consistent, manageable, and ultimately much more efficient.
To create a postclosing trial balance
, repeat step 3 above, highlighting all journal entries, including the closing entry.
More often than not, CPAs have to spend more time correcting client errors, working around the limitations of client G/L systems, importing data from many different incompatible systems and even re-keying trial balance
data, than they spend performing their professional work.
Of course, the most obvious error is simply a trial balance
where the debit and credit columns are not equal.
The only way to capture and reconcile the differences between the two reporting formats is by starting the conversion process at the trial balance
level, where the differences between accounting principles and practices are reflected in the detail of accounts and balances.
This will be a real timesaver for CPAs who get trial balances
and accounting details from their clients to enter into their own trial balance
, tax or audit software.
The demo shows you how to publish your general ledger trial balance
The post closing trial balance
of Green Company contains several errors.