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Unadjusted vs Adjusted Trial Balance definitions Flashcards

Unadjusted vs Adjusted Trial Balance definitions
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  • Trial Balance
    A listing of all accounts and their balances at a specific point, used to verify that total debits equal total credits.
  • Unadjusted Trial Balance
    A preliminary list of account balances before any period-end adjustments are made for accruals or deferrals.
  • Adjusted Trial Balance
    A revised list of account balances after all necessary adjustments, serving as the basis for financial statements.
  • Adjusting Entries
    End-of-period updates to account balances for items like accruals, prepaids, and depreciation to reflect true financial position.
  • Accrued Expenses
    Obligations for costs incurred but not yet paid or recorded, such as unpaid salaries at period end.
  • Prepaid Expenses
    Payments made in advance for goods or services, recognized as assets until consumed or expired.
  • Depreciation
    Systematic allocation of the cost of a long-term asset over its useful life, reflecting wear and usage.
  • Accumulated Depreciation
    Total depreciation recorded against an asset since its acquisition, reducing its book value.
  • Balance Sheet Accounts
    Categories including assets, liabilities, and equity, listed first in the trial balance and reported on the balance sheet.
  • Income Statement Accounts
    Categories such as revenues and expenses, listed after balance sheet accounts in the trial balance.
  • Assets
    Resources owned by a business, such as cash or supplies, expected to provide future economic benefits.
  • Liabilities
    Obligations or debts owed to outsiders, such as accounts payable or salary payable.
  • Equity
    Owner’s residual interest in the assets of a business after deducting liabilities.
  • Rent Expense
    Cost recognized for the use of rented property or equipment during a period, often adjusted from prepaid amounts.
  • Salary Payable
    Liability account representing salaries owed to employees but not yet paid at the end of a period.