Describe the flow of accounting information from the unadjusted trial balance into the adjusted trial balance...

Describe the flow of accounting information from the unadjusted trial balance into the adjusted trial balance and financial statements.

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An accounting Information is a 10k Statement also known as 10 coloum worksheet. It starts will Unadjusted Trail balance then there will be few adjustment of year end entry and then we will have the adjusted trail balance.A trail balance contains all the information in a single sheet only. We will divide the Data into Income statement, Shareholders Equity and Balance sheet.

An Unadjusted trail balance is the raw data of the organistation without any adjustments. At the year end there are few adjustment that are required to made like accrued wages, Prepaid Expenses, Dividends payments, any errors etc. This are the adjustment entries which are made to bring the Trail balance in an Accrual basis. After this adjustment we will have the Adjusted Trail Balance.

The Adjusted trail balance will have all the Data throughout the year and upto the closing date.

We will transfer the Income Statement data like Sales, COGS, Expenses and Other income to the Income statement. Then we will prepare the Income statement and find out the Net profit that the company has earned.

After that we will prepare the shareholders Equity, in which we will take the Opening balance and Add current year profit as calculated in income statement and reduce it by Withdrawels. So we get the Closing balance of shareholders equity.

At last we will prepare the Financial statement also known as Blanace sheet and the remaing leftover data in adjusted trail balance like Assets, Cash, Investment, Debtors, creditors, Payables, receivables etc will be transferred here. We also transfer the closing balance of Shareholder Equity in Blanace sheet. At last both the Asset and Libilities side should tally.

Here is a sample 10k report which show us the flow of Data from unadjusted trail balance to finacial statement.

Please like the answer and feel free to comment on any doubt if you have. Thank you have a nice day.

ekkarill92 answered 2 years ago

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Describe the flow of accounting information from the unadjusted trial balance into the adjusted trial balance...

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