Enter account titles and unadjusted balances in the Trial Balance columns and total amounts. Enter adjusting entries in adjustments column and total amounts. Calculate account balances and enter the amounts in the Adjusted Trial Balance column. Extend assets, liabilities and owners equity to Balance Sheet columns and total. Key element of accrual accounting.
Worksheet can identify accounts requiring adjustments.
If adjustments are directly entered on the worksheet must then be journalised. After posting, the ledger account balances should equal the worksheet balances. Consists of journalising and posting closing entries. Sets the balances of Revenues, Expenses and Drawings back to zero by transferring the balance of the account to the capital account. Balances are related to a particular period.