Business Accounting Homework: Trial Balance, Entries, and Analysis

This document provides a comprehensive solution to a business accounting homework assignment. It covers key concepts such as the trial balance, explaining its purpose in verifying the accuracy of transaction entries and identifying errors. The solution delves into adjusting journal entries, highlighting their role in updating accounts according to the accrual concept, including accrued revenue, expenses, unearned revenue, and prepaid expenses. The assignment also addresses the adjusted trial balance, emphasizing its function in ensuring the equality of debit and credit balances. Finally, the solution differentiates between adjusting and closing journal entries, clarifying their respective purposes in updating accounting records and preparing for the new accounting period. References to relevant accounting literature are included, offering a well-rounded understanding of the subject matter.

Running head: BUSINESS ACCOUNTING
Business Accounting
Name of the Student
Name of the University
Author Note

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Table of Contents
Answer to Question 1.................................................................................................................2
Answer to Question 2.................................................................................................................2
Answer to Question 3.................................................................................................................2
Answer to Question 4.................................................................................................................2

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Answer to Question 1
The trial balance in the process of accounting refers to the bookkeeping worksheet
where all the ledgers balances are compiled into debit and credit columns. A corporate entity
has to periodically prepare a trial balance, usually at the end of every financial period of
reporting (Zimmerman and Libby 2017). The main general purpose for the preparation of the
trial balance is to confirm whether the transaction entries of the business organisation in the
bookkeeping system of a company are mathematically accurate.
The purpose of preparation of the trial balance can be segregated under the following
heads:
 Balancing of books: In order to make sure that the accounts are correct the
debit and the credit columns are to be made equal (Lerner 2016). The trial
balance helps to make the necessary step to overcome the lag and identify the
issue.
 Identification of the errors: The different recording errors in the
bookkeeping process like the errors of commission and omission can be
highlighted with the help of trial balance.
 Accuracy: The trial balance helps to ensure that the book keeping system is
mathematically correct. This is the primary purpose of the trial balance
preparation.
 Final account preparation: The various final accounts income statement and
the balance sheet are prepared on the basis of the trial balance since this the
primary step.
 Helps in the process of comparison and analysis: Since the trial balance is
the summary step of all the ledger accounts in an accounting period, it helps in

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the effective tool for comparison (Ijiri 2014). It is easy to compare the
balances of the current period with those of the prior periods.
Answer to Question 2
The adjusting journal entry includes the income statement account that is the revenue
or expense along with a balance sheet account (asset or liability), and typically relates to the
accounts for accrued revenue, accrued expenses, unearned revenue and prepaid expenses.
The primary purpose of the adjusting entries is for the update the accounts for the
conformation with the accrual concept. In the beginning of the accounting period, some
expenses and income may have not been taken up or updated or recorded. Therefore, there is
a motive to updating the accounts.
Answer to Question
The adjusted trial balance refers to an internal document which is not a financial
statement. The primary purpose of the adjusted trial balance is to be sure and certain that the
sum of the total debit balances amount in the general ledger equals the total of the credit
balances amount.
Answer to Question 4
The adjusted journal entries are prepared at the year for the purpose of making the
entity’s accounting records and financial statements updated with the accrual basis of
accounting (Azmat and Lymer 2016). On the other hand the Closing journal entries are at the
end of the financial accounting period accounting period for the purpose of closing entries is
to confirm that each revenue and expense account will begin the next accounting year with a
zero balance. This require debit entries are to be made into each of the temporary accounts
that have a credit balance.

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References
Azmat, N. and Lymer, A., 2016. Basic Accounting. Teach Yourself.
Ijiri, Y., 2014. The beauty of double-entry bookkeeping and its impact on the nature of
accounting information. Economie Notes by Monte dei Paschi di Siena, 22(2-1993), pp.265-
285.
Lerner, J.J., 2016. Bookkeeping and accounting.
Zimmerman, J. and Libby, D.V., 2017. BASIC BOOKKEEPING AND ACCOUNTING
FOR THE PRIVATE PRACTITIONER. Handbook of Private Practice: Keys to Success for
Mental Health Practitioners.