{"id":3088,"date":"2020-10-08T22:09:22","date_gmt":"2020-10-08T22:09:22","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-financialaccounting\/?post_type=chapter&#038;p=3088"},"modified":"2020-11-18T05:17:35","modified_gmt":"2020-11-18T05:17:35","slug":"using-the-worksheet","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/chapter\/using-the-worksheet\/","title":{"raw":"Using the Worksheet","rendered":"Using the Worksheet"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcomes<\/h3>\r\n<ul>\r\n \t<li>Creating an adjusted trial balance using a worksheet<\/li>\r\n<\/ul>\r\n<\/div>\r\n<img class=\"alignright wp-image-3219\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5107\/2020\/10\/09222458\/ACStep6-996x1024.jpg\" alt=\"Step 6. Prepare adjusted trial balance.\" width=\"202\" height=\"208\" \/>Before we create the adjusted trial balance from the ledgers, let\u2019s take a look at one of the common ways that accountants prepare and track the adjustments they propose to make. It can be a bit inefficient to make each adjustment independently, the way we did in the prior section, because things can be interconnected and will most likely be way more complicated than our simple NeatNiks example. For that reason, experienced accountants use a worksheet.\r\n\r\nThe worksheet starts with the unadjusted trial balance:\r\n<table class=\"fin-table gridded\"><caption>NeatNiks\r\nTrial Balance (unadjusted)\r\nFor the month ended October 31, 20XX<\/caption>\r\n<thead>\r\n<tr>\r\n<th scope=\"col\"><span class=\"u-sr-only\">Reference No.<\/span><\/th>\r\n<th scope=\"col\"><span class=\"u-sr-only\">Accounts<\/span><\/th>\r\n<th scope=\"col\">Debits<\/th>\r\n<th scope=\"col\">Credits<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>110<\/td>\r\n<td>Checking<\/td>\r\n<td class=\"r\">3,500.00<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>120<\/td>\r\n<td>Accounts Receivable<\/td>\r\n<td class=\"r\">5,650.00<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>125<\/td>\r\n<td>Supplies<\/td>\r\n<td class=\"r\">2,600.00<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>130<\/td>\r\n<td>Prepaid Rent<\/td>\r\n<td class=\"r\">12,000.00<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>210<\/td>\r\n<td>Account Payable<\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">1,600.00<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>220<\/td>\r\n<td>Contractor Payable<\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">-<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>310<\/td>\r\n<td class=\"r\">Nick Frank, Capital Contributions<\/td>\r\n<td class=\"r\"><\/td>\r\n<td>20,000.00<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>330<\/td>\r\n<td>Nick Frank, Withdrawals<\/td>\r\n<td class=\"r\">4,000.00<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>410<\/td>\r\n<td>Service Revenue<\/td>\r\n<td class=\"r\"><\/td>\r\n<td class=\"r\">8,750.00<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>510<\/td>\r\n<td>Insurance Revenue<\/td>\r\n<td class=\"r\">1,500.00<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>520<\/td>\r\n<td>Rent Expense<\/td>\r\n<td class=\"r\">-<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>530<\/td>\r\n<td>Supplies Expense<\/td>\r\n<td class=\"r\">-<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<tr>\r\n<td>540<\/td>\r\n<td>Contractor Expense<\/td>\r\n<td class=\"r\">1,100.00<\/td>\r\n<td class=\"r\"><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<tfoot>\r\n<tr>\r\n<td><\/td>\r\n<td>Totals<\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350.00\r\n<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350.00\r\n<span class=\"u-sr-only\">Double line<\/span><\/td>\r\n<\/tr>\r\n<\/tfoot>\r\n<\/table>\r\nAnd then we expand it to accommodate our proposed adjustments:\r\n<table class=\"fin-table gridded\">\r\n  <caption>NeatNiks\r\n    Trial Balance\r\n    For the Month ended October 31, 20XX\r\n  <\/caption>\r\n  <thead>\r\n    <tr>\r\n      <td colspan=\"2\"><\/td>\r\n      <th class=\"c\" colspan=\"2\" scope=\"col\">Unadjusted Trial Balance<\/th>\r\n      <th class=\"c\" colspan=\"2\" scope=\"col\">Adjustments<\/th>\r\n      <th class=\"c\" colspan=\"2\" scope=\"col\">Adjusted Trial Balance<\/th>\r\n    <\/tr>\r\n    <tr>\r\n      <th scope=\"col\"><span class=\"u-sr-only\">Reference No.<\/span><\/th>\r\n      <th scope=\"col\"><span class=\"u-sr-only\">Accounts<\/span><\/th>\r\n      <th class=\"c\" scope=\"col\">DR<\/th>\r\n      <th class=\"c\" scope=\"col\">CR<\/th>\r\n      <th class=\"c\" scope=\"col\">DR<\/th>\r\n      <th class=\"c\" scope=\"col\">CR<\/th>\r\n      <th class=\"c\" scope=\"col\">DR<\/th>\r\n      <th class=\"c\" scope=\"col\">CR<\/th>\r\n    <\/tr>\r\n  <\/thead>\r\n  <tbody>\r\n    <tr>\r\n      <td>110<\/td>\r\n      <td>Checking<\/td>\r\n      <td class=\"r\">3,500.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">3,500.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>120<\/td>\r\n      <td>Accounts Receivable<\/td>\r\n      <td class=\"r\">5,650.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">5,650.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>125<\/td>\r\n      <td>Supplies<\/td>\r\n      <td class=\"r\">2,600.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">2,600.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>130<\/td>\r\n      <td>Prepaid Rent<\/td>\r\n      <td class=\"r\">12,000.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">12,000.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>210<\/td>\r\n      <td>Accounts Payable<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">1,600.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">1,600.00<\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>220<\/td>\r\n      <td>Contractor Payable<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">-<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">-<\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>310<\/td>\r\n      <td>Nick Frank, Capital Contributions<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">20,000.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">20,000.00<\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>330<\/td>\r\n      <td>Nick Frank, Withdrawals<\/td>\r\n      <td class=\"r\">4,000.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">4,000.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>410<\/td>\r\n      <td>Service Revenue<\/td>\r\n   <td class=\"r\"><\/td>\r\n      <td class=\"r\">8,750.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">8,750.00<\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>510<\/td>\r\n      <td>Insurance Expense<\/td>\r\n      <td class=\"r\">1,500.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">1,500.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>520<\/td>\r\n      <td>Rent Expense<\/td>\r\n      <td class=\"r\">-<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">-<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>530<\/td>\r\n      <td>Supplies Expense<\/td>\r\n      <td class=\"r\">-<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">-<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>540<\/td>\r\n      <td>Contractor Expense<\/td>\r\n      <td class=\"r\">1,100.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">1,100.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n  <\/tbody>\r\n  <tfoot>\r\n    <tr>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350\r\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\r\n      <td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350\r\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\r\n      <td class=\"r line-single line-double\"><\/td>\r\n      <td class=\"r line-single line-double\"><\/td>\r\n      <td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350\r\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\r\n      <td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350\r\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\r\n    <\/tr>\r\n  <\/tfoot>\r\n<\/table>\r\nInstead of using T accounts as we analyze accounts, we track everything on the spreadsheet, making journal entries and labeling them as we go, so we can see the effect they will have on the accounts AND so we can see the whole picture as we build it.\r\n<table class=\"fin-table gridded\">\r\n  <caption>NeatNiks\r\n    Trial Balance\r\n    For the Month ended October 31, 20XX\r\n  <\/caption>\r\n  <thead>\r\n    <tr>\r\n      <td colspan=\"2\"><\/td>\r\n      <th class=\"c\" colspan=\"2\" scope=\"col\">Unadjusted Trial Balance<\/th>\r\n      <th rowspan=\"2\">Reference<\/th>\r\n      <th class=\"c\" colspan=\"3\" scope=\"col\">Adjustments<\/th>\r\n      <th class=\"c\" colspan=\"2\" scope=\"col\">Adjusted Trial Balance<\/th>\r\n    <\/tr>\r\n    <tr>\r\n      <th scope=\"col\"><span class=\"u-sr-only\">Reference<\/span><\/th>\r\n      <th scope=\"col\"><span class=\"u-sr-only\">Accounts<\/span><\/th>\r\n      <th class=\"c\" scope=\"col\">DR<\/th>\r\n      <th class=\"c\" scope=\"col\">CR<\/th>\r\n      <th class=\"c\" scope=\"col\">DR<\/th>\r\n      <th>Reference<\/th>\r\n      <th class=\"c\" scope=\"col\">CR<\/th>\r\n      <th class=\"c\" scope=\"col\">DR<\/th>\r\n      <th class=\"c\" scope=\"col\">CR<\/th>\r\n    <\/tr>\r\n  <\/thead>\r\n  <tbody>\r\n    <tr>\r\n      <td>110<\/td>\r\n      <td>Checking<\/td>\r\n      <td class=\"r\">3,500.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">3,500.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>120<\/td>\r\n      <td>Accounts Receivable<\/td>\r\n      <td class=\"r\">5,650.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">5,650.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>125<\/td>\r\n      <td class=\"highlight\">Supplies<\/td>\r\n      <td class=\"r highlight\">2,600.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"c highlight\">AJE1<\/td>\r\n      <td class=\"r highlight r\">1,600.00<\/td>\r\n      <td class=\"r highlight\">1,000.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>130<\/td>\r\n      <td>Prepaid Rent<\/td>\r\n      <td class=\"r\">12,000.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">12,000.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>210<\/td>\r\n      <td>Accounts Payable<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">1,600.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">1,600.00<\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>220<\/td>\r\n      <td>Contractor Payable<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">-<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">-<\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>310<\/td>\r\n      <td>Nick Frank, Capital Contributions<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">20,000.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">20,000.00<\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>330<\/td>\r\n      <td>Nick Frank, Withdrawals<\/td>\r\n      <td class=\"r\">4,000.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">4,000.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>410<\/td>\r\n      <td>Service Revenue<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">8,750.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">8,750.00<\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>510<\/td>\r\n      <td>Insurance Expense<\/td>\r\n      <td class=\"r\">1,500.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">1,500.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>520<\/td>\r\n      <td>Rent Expense<\/td>\r\n      <td class=\"r\">-<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">-<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>530<\/td>\r\n      <td class=\"highlight\">Supplies Expense<\/td>\r\n      <td class=\"r highlight\">-<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"c highlight\">AJE1<\/td>\r\n      <td class=\"highlight r\">1,600.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r highlight\">1,600.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>540<\/td>\r\n      <td>Contractor Expense<\/td>\r\n      <td class=\"r\">1,100.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">1,100.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n  <\/tbody>\r\n  <tfoot>\r\n    <tr>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350\r\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\r\n      <td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350\r\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\r\n      <td class=\"r line-single line-double\"><\/td>\r\n      <td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 1,600\r\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\r\n      <td class=\"r line-single line-double\"><\/td>\r\n      <td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 1,600\r\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\r\n      <td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350\r\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\r\n      <td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350\r\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\r\n  <\/tfoot>\r\n<\/table>\r\nWhen we are done with our analysis and all the journal entries are written, we post them and then we compare the trial balance from our adjusted general ledger accounts to the worksheet. If we did everything right, they should match.\r\n<table class=\"fin-table gridded\">\r\n  <caption>NeatNiks\r\n    Trial Balance\r\n    For the Month ended October 31, 20XX\r\n  <\/caption>\r\n  <thead>\r\n    <tr>\r\n      <td colspan=\"2\"><\/td>\r\n      <th class=\"c\" colspan=\"2\" scope=\"col\">Unadjusted Trial Balance<\/th>\r\n      <th rowspan=\"2\">Reference<\/th>\r\n      <th class=\"c\" colspan=\"3\" scope=\"col\">Adjustments<\/th>\r\n      <th class=\"c\" colspan=\"2\" scope=\"col\">Adjusted Trial Balance<\/th>\r\n    <\/tr>\r\n    <tr>\r\n      <th scope=\"col\"><span class=\"u-sr-only\">Reference No.<\/span><\/th>\r\n      <th scope=\"col\"><span class=\"u-sr-only\">Accounts<\/span><\/th>\r\n      <th class=\"c\" scope=\"col\">DR<\/th>\r\n      <th class=\"c\" scope=\"col\">CR<\/th>\r\n      <th class=\"c\" scope=\"col\">DR<\/th>\r\n      <th>Reference<\/th>\r\n      <th class=\"c\" scope=\"col\">CR<\/th>\r\n      <th class=\"c\" scope=\"col\">DR<\/th>\r\n      <th class=\"c\" scope=\"col\">CR<\/th>\r\n    <\/tr>\r\n  <\/thead>\r\n  <tbody>\r\n    <tr>\r\n      <td>110<\/td>\r\n      <td>Checking<\/td>\r\n      <td class=\"r\">3,500.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">3,500.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>120<\/td>\r\n      <td>Accounts Receivable<\/td>\r\n      <td class=\"r\">5,650.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">5,650.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>125<\/td>\r\n      <td>Supplies<\/td>\r\n      <td class=\"r\">2,600.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"c\">AJE1<\/td>\r\n      <td class=\"r\">1,600.00<\/td>\r\n      <td class=\"r\">1,000.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>130<\/td>\r\n      <td>Prepaid Rent<\/td>\r\n      <td class=\"r\">12,000.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"c\">AJE2<\/td>\r\n      <td class=\"r\">2,000.00<\/td>\r\n      <td class=\"r\">10,000.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>210<\/td>\r\n      <td>Accounts Payable<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">1,600.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">1,600.00<\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>220<\/td>\r\n      <td>Contractor Payable<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">-<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"c\">AJE3<\/td>\r\n      <td class=\"r\">1,200.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">1,200.00<\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>310<\/td>\r\n      <td>Nick Frank, Capital Contributions<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">20,000.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">20,000.00<\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>330<\/td>\r\n      <td>Nick Frank, Withdrawals<\/td>\r\n      <td class=\"r\">4,000.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">4,000.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>410<\/td>\r\n      <td>Service Revenue<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">8,750.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">8,750.00<\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>510<\/td>\r\n      <td>Insurance Expense<\/td>\r\n      <td class=\"r\">1,500.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">1,500.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>520<\/td>\r\n      <td>Rent Expense<\/td>\r\n      <td class=\"r\">-<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"c\">AJE2<\/td>\r\n      <td class=\"r\">2,000.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">2,000.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>530<\/td>\r\n      <td>Supplies Expense<\/td>\r\n      <td class=\"r\">-<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"c\">AJE1<\/td>\r\n      <td class=\"r\">1,600.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">1,600.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <tr>\r\n      <td>540<\/td>\r\n      <td>Contractor Expense<\/td>\r\n      <td class=\"r\">1,100.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"c\">AJE3<\/td>\r\n      <td class=\"r\">1,200.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\">2,300.00<\/td>\r\n      <td class=\"r\"><\/td>\r\n    <\/tr>\r\n    <\/tbody>\r\n    <tfoot>\r\n    <tr>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r\"><\/td>\r\n      <td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350\r\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\r\n      <td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350\r\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\r\n      <td class=\"r line-single line-double\"><\/td>\r\n      <td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 4,800.00\r\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\r\n      <td class=\"r line-single line-double\"><\/td>\r\n      <td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 4,800.00\r\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\r\n      <td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 31,550.00\r\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\r\n      <td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 31,550.00\r\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\r\n    <\/tr>\r\n  <\/tfoot>\r\n<\/table>\r\nOnce we have made all the adjustments to the ledger accounts and we have run the adjusted trial balance and feel confident that all the assets, liabilities, capital accounts, revenues, and expenses are recorded and are being reported according to GAAP (or, if we are a small business, as close to GAAP as we want to be), then we are ready for the final step: to create the financial statements.\r\n<div class=\"textbox tryit\">\r\n<h3>Practice Question<\/h3>\r\nhttps:\/\/assessments.lumenlearning.com\/assessments\/23389\r\n\r\n[ohm_question]202385-202384[\/ohm_question]\r\n\r\n<\/div>","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Outcomes<\/h3>\n<ul>\n<li>Creating an adjusted trial balance using a worksheet<\/li>\n<\/ul>\n<\/div>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-3219\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5107\/2020\/10\/09222458\/ACStep6-996x1024.jpg\" alt=\"Step 6. Prepare adjusted trial balance.\" width=\"202\" height=\"208\" \/>Before we create the adjusted trial balance from the ledgers, let\u2019s take a look at one of the common ways that accountants prepare and track the adjustments they propose to make. It can be a bit inefficient to make each adjustment independently, the way we did in the prior section, because things can be interconnected and will most likely be way more complicated than our simple NeatNiks example. For that reason, experienced accountants use a worksheet.<\/p>\n<p>The worksheet starts with the unadjusted trial balance:<\/p>\n<table class=\"fin-table gridded\">\n<caption>NeatNiks<br \/>\nTrial Balance (unadjusted)<br \/>\nFor the month ended October 31, 20XX<\/caption>\n<thead>\n<tr>\n<th scope=\"col\"><span class=\"u-sr-only\">Reference No.<\/span><\/th>\n<th scope=\"col\"><span class=\"u-sr-only\">Accounts<\/span><\/th>\n<th scope=\"col\">Debits<\/th>\n<th scope=\"col\">Credits<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>110<\/td>\n<td>Checking<\/td>\n<td class=\"r\">3,500.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>120<\/td>\n<td>Accounts Receivable<\/td>\n<td class=\"r\">5,650.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>125<\/td>\n<td>Supplies<\/td>\n<td class=\"r\">2,600.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>130<\/td>\n<td>Prepaid Rent<\/td>\n<td class=\"r\">12,000.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>210<\/td>\n<td>Account Payable<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,600.00<\/td>\n<\/tr>\n<tr>\n<td>220<\/td>\n<td>Contractor Payable<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">&#8211;<\/td>\n<\/tr>\n<tr>\n<td>310<\/td>\n<td class=\"r\">Nick Frank, Capital Contributions<\/td>\n<td class=\"r\"><\/td>\n<td>20,000.00<\/td>\n<\/tr>\n<tr>\n<td>330<\/td>\n<td>Nick Frank, Withdrawals<\/td>\n<td class=\"r\">4,000.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>410<\/td>\n<td>Service Revenue<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">8,750.00<\/td>\n<\/tr>\n<tr>\n<td>510<\/td>\n<td>Insurance Revenue<\/td>\n<td class=\"r\">1,500.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>520<\/td>\n<td>Rent Expense<\/td>\n<td class=\"r\">&#8211;<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>530<\/td>\n<td>Supplies Expense<\/td>\n<td class=\"r\">&#8211;<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>540<\/td>\n<td>Contractor Expense<\/td>\n<td class=\"r\">1,100.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<\/tbody>\n<tfoot>\n<tr>\n<td><\/td>\n<td>Totals<\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350.00<br \/>\n<span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350.00<br \/>\n<span class=\"u-sr-only\">Double line<\/span><\/td>\n<\/tr>\n<\/tfoot>\n<\/table>\n<p>And then we expand it to accommodate our proposed adjustments:<\/p>\n<table class=\"fin-table gridded\">\n<caption>NeatNiks<br \/>\n    Trial Balance<br \/>\n    For the Month ended October 31, 20XX<br \/>\n  <\/caption>\n<thead>\n<tr>\n<td colspan=\"2\"><\/td>\n<th class=\"c\" colspan=\"2\" scope=\"col\">Unadjusted Trial Balance<\/th>\n<th class=\"c\" colspan=\"2\" scope=\"col\">Adjustments<\/th>\n<th class=\"c\" colspan=\"2\" scope=\"col\">Adjusted Trial Balance<\/th>\n<\/tr>\n<tr>\n<th scope=\"col\"><span class=\"u-sr-only\">Reference No.<\/span><\/th>\n<th scope=\"col\"><span class=\"u-sr-only\">Accounts<\/span><\/th>\n<th class=\"c\" scope=\"col\">DR<\/th>\n<th class=\"c\" scope=\"col\">CR<\/th>\n<th class=\"c\" scope=\"col\">DR<\/th>\n<th class=\"c\" scope=\"col\">CR<\/th>\n<th class=\"c\" scope=\"col\">DR<\/th>\n<th class=\"c\" scope=\"col\">CR<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>110<\/td>\n<td>Checking<\/td>\n<td class=\"r\">3,500.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">3,500.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>120<\/td>\n<td>Accounts Receivable<\/td>\n<td class=\"r\">5,650.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">5,650.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>125<\/td>\n<td>Supplies<\/td>\n<td class=\"r\">2,600.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">2,600.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>130<\/td>\n<td>Prepaid Rent<\/td>\n<td class=\"r\">12,000.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">12,000.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>210<\/td>\n<td>Accounts Payable<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,600.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,600.00<\/td>\n<\/tr>\n<tr>\n<td>220<\/td>\n<td>Contractor Payable<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">&#8211;<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">&#8211;<\/td>\n<\/tr>\n<tr>\n<td>310<\/td>\n<td>Nick Frank, Capital Contributions<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">20,000.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">20,000.00<\/td>\n<\/tr>\n<tr>\n<td>330<\/td>\n<td>Nick Frank, Withdrawals<\/td>\n<td class=\"r\">4,000.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">4,000.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>410<\/td>\n<td>Service Revenue<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">8,750.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">8,750.00<\/td>\n<\/tr>\n<tr>\n<td>510<\/td>\n<td>Insurance Expense<\/td>\n<td class=\"r\">1,500.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,500.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>520<\/td>\n<td>Rent Expense<\/td>\n<td class=\"r\">&#8211;<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">&#8211;<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>530<\/td>\n<td>Supplies Expense<\/td>\n<td class=\"r\">&#8211;<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">&#8211;<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>540<\/td>\n<td>Contractor Expense<\/td>\n<td class=\"r\">1,100.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,100.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<\/tbody>\n<tfoot>\n<tr>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350<br \/>\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350<br \/>\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><\/td>\n<td class=\"r line-single line-double\"><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350<br \/>\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350<br \/>\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\n<\/tr>\n<\/tfoot>\n<\/table>\n<p>Instead of using T accounts as we analyze accounts, we track everything on the spreadsheet, making journal entries and labeling them as we go, so we can see the effect they will have on the accounts AND so we can see the whole picture as we build it.<\/p>\n<table class=\"fin-table gridded\">\n<caption>NeatNiks<br \/>\n    Trial Balance<br \/>\n    For the Month ended October 31, 20XX<br \/>\n  <\/caption>\n<thead>\n<tr>\n<td colspan=\"2\"><\/td>\n<th class=\"c\" colspan=\"2\" scope=\"col\">Unadjusted Trial Balance<\/th>\n<th rowspan=\"2\">Reference<\/th>\n<th class=\"c\" colspan=\"3\" scope=\"col\">Adjustments<\/th>\n<th class=\"c\" colspan=\"2\" scope=\"col\">Adjusted Trial Balance<\/th>\n<\/tr>\n<tr>\n<th scope=\"col\"><span class=\"u-sr-only\">Reference<\/span><\/th>\n<th scope=\"col\"><span class=\"u-sr-only\">Accounts<\/span><\/th>\n<th class=\"c\" scope=\"col\">DR<\/th>\n<th class=\"c\" scope=\"col\">CR<\/th>\n<th class=\"c\" scope=\"col\">DR<\/th>\n<th>Reference<\/th>\n<th class=\"c\" scope=\"col\">CR<\/th>\n<th class=\"c\" scope=\"col\">DR<\/th>\n<th class=\"c\" scope=\"col\">CR<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>110<\/td>\n<td>Checking<\/td>\n<td class=\"r\">3,500.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">3,500.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>120<\/td>\n<td>Accounts Receivable<\/td>\n<td class=\"r\">5,650.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">5,650.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>125<\/td>\n<td class=\"highlight\">Supplies<\/td>\n<td class=\"r highlight\">2,600.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"c highlight\">AJE1<\/td>\n<td class=\"r highlight r\">1,600.00<\/td>\n<td class=\"r highlight\">1,000.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>130<\/td>\n<td>Prepaid Rent<\/td>\n<td class=\"r\">12,000.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">12,000.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>210<\/td>\n<td>Accounts Payable<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,600.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,600.00<\/td>\n<\/tr>\n<tr>\n<td>220<\/td>\n<td>Contractor Payable<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">&#8211;<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">&#8211;<\/td>\n<\/tr>\n<tr>\n<td>310<\/td>\n<td>Nick Frank, Capital Contributions<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">20,000.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">20,000.00<\/td>\n<\/tr>\n<tr>\n<td>330<\/td>\n<td>Nick Frank, Withdrawals<\/td>\n<td class=\"r\">4,000.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">4,000.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>410<\/td>\n<td>Service Revenue<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">8,750.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">8,750.00<\/td>\n<\/tr>\n<tr>\n<td>510<\/td>\n<td>Insurance Expense<\/td>\n<td class=\"r\">1,500.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,500.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>520<\/td>\n<td>Rent Expense<\/td>\n<td class=\"r\">&#8211;<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">&#8211;<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>530<\/td>\n<td class=\"highlight\">Supplies Expense<\/td>\n<td class=\"r highlight\">&#8211;<\/td>\n<td class=\"r\"><\/td>\n<td class=\"c highlight\">AJE1<\/td>\n<td class=\"highlight r\">1,600.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r highlight\">1,600.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>540<\/td>\n<td>Contractor Expense<\/td>\n<td class=\"r\">1,100.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,100.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<\/tbody>\n<tfoot>\n<tr>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350<br \/>\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350<br \/>\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 1,600<br \/>\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 1,600<br \/>\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350<br \/>\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350<br \/>\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\n<\/tr>\n<\/tfoot>\n<\/table>\n<p>When we are done with our analysis and all the journal entries are written, we post them and then we compare the trial balance from our adjusted general ledger accounts to the worksheet. If we did everything right, they should match.<\/p>\n<table class=\"fin-table gridded\">\n<caption>NeatNiks<br \/>\n    Trial Balance<br \/>\n    For the Month ended October 31, 20XX<br \/>\n  <\/caption>\n<thead>\n<tr>\n<td colspan=\"2\"><\/td>\n<th class=\"c\" colspan=\"2\" scope=\"col\">Unadjusted Trial Balance<\/th>\n<th rowspan=\"2\">Reference<\/th>\n<th class=\"c\" colspan=\"3\" scope=\"col\">Adjustments<\/th>\n<th class=\"c\" colspan=\"2\" scope=\"col\">Adjusted Trial Balance<\/th>\n<\/tr>\n<tr>\n<th scope=\"col\"><span class=\"u-sr-only\">Reference No.<\/span><\/th>\n<th scope=\"col\"><span class=\"u-sr-only\">Accounts<\/span><\/th>\n<th class=\"c\" scope=\"col\">DR<\/th>\n<th class=\"c\" scope=\"col\">CR<\/th>\n<th class=\"c\" scope=\"col\">DR<\/th>\n<th>Reference<\/th>\n<th class=\"c\" scope=\"col\">CR<\/th>\n<th class=\"c\" scope=\"col\">DR<\/th>\n<th class=\"c\" scope=\"col\">CR<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>110<\/td>\n<td>Checking<\/td>\n<td class=\"r\">3,500.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">3,500.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>120<\/td>\n<td>Accounts Receivable<\/td>\n<td class=\"r\">5,650.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">5,650.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>125<\/td>\n<td>Supplies<\/td>\n<td class=\"r\">2,600.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"c\">AJE1<\/td>\n<td class=\"r\">1,600.00<\/td>\n<td class=\"r\">1,000.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>130<\/td>\n<td>Prepaid Rent<\/td>\n<td class=\"r\">12,000.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"c\">AJE2<\/td>\n<td class=\"r\">2,000.00<\/td>\n<td class=\"r\">10,000.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>210<\/td>\n<td>Accounts Payable<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,600.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,600.00<\/td>\n<\/tr>\n<tr>\n<td>220<\/td>\n<td>Contractor Payable<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">&#8211;<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"c\">AJE3<\/td>\n<td class=\"r\">1,200.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,200.00<\/td>\n<\/tr>\n<tr>\n<td>310<\/td>\n<td>Nick Frank, Capital Contributions<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">20,000.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">20,000.00<\/td>\n<\/tr>\n<tr>\n<td>330<\/td>\n<td>Nick Frank, Withdrawals<\/td>\n<td class=\"r\">4,000.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">4,000.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>410<\/td>\n<td>Service Revenue<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">8,750.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">8,750.00<\/td>\n<\/tr>\n<tr>\n<td>510<\/td>\n<td>Insurance Expense<\/td>\n<td class=\"r\">1,500.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,500.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>520<\/td>\n<td>Rent Expense<\/td>\n<td class=\"r\">&#8211;<\/td>\n<td class=\"r\"><\/td>\n<td class=\"c\">AJE2<\/td>\n<td class=\"r\">2,000.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">2,000.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>530<\/td>\n<td>Supplies Expense<\/td>\n<td class=\"r\">&#8211;<\/td>\n<td class=\"r\"><\/td>\n<td class=\"c\">AJE1<\/td>\n<td class=\"r\">1,600.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">1,600.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<tr>\n<td>540<\/td>\n<td>Contractor Expense<\/td>\n<td class=\"r\">1,100.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"c\">AJE3<\/td>\n<td class=\"r\">1,200.00<\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r\">2,300.00<\/td>\n<td class=\"r\"><\/td>\n<\/tr>\n<\/tbody>\n<tfoot>\n<tr>\n<td class=\"r\"><\/td>\n<td class=\"r\"><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350<br \/>\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 30,350<br \/>\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 4,800.00<br \/>\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 4,800.00<br \/>\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 31,550.00<br \/>\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\n<td class=\"r line-single line-double\"><span class=\"u-sr-only\">Single line<\/span> 31,550.00<br \/>\n        <span class=\"u-sr-only\">Double line<\/span><\/td>\n<\/tr>\n<\/tfoot>\n<\/table>\n<p>Once we have made all the adjustments to the ledger accounts and we have run the adjusted trial balance and feel confident that all the assets, liabilities, capital accounts, revenues, and expenses are recorded and are being reported according to GAAP (or, if we are a small business, as close to GAAP as we want to be), then we are ready for the final step: to create the financial statements.<\/p>\n<div class=\"textbox tryit\">\n<h3>Practice Question<\/h3>\n<p>\t<iframe id=\"lumen_assessment_23389\" class=\"resizable\" src=\"https:\/\/assessments.lumenlearning.com\/assessments\/load?assessment_id=23389&#38;embed=1&#38;external_user_id=&#38;external_context_id=&#38;iframe_resize_id=lumen_assessment_23389\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:400px;\"><br \/>\n\t<\/iframe><\/p>\n<p><iframe loading=\"lazy\" id=\"ohm202385\" class=\"resizable\" src=\"https:\/\/ohm.lumenlearning.com\/multiembedq.php?id=202385-202384&theme=oea&iframe_resize_id=ohm202385&show_question_numbers\" width=\"100%\" height=\"150\"><\/iframe><\/p>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-3088\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Using the Worksheet. <strong>Authored by<\/strong>: Joseph Cooke. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":17,"menu_order":11,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Using the Worksheet\",\"author\":\"Joseph Cooke\",\"organization\":\"Lumen 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