The unadjusted or opening trial balance is prepared in the first two columns of the worksheet. Adjustments are then made to the accounts to arrive at an adjusted trial balance. Account balances from the adjusted trial balance then go either to the income statement or to balance sheet columns.
Local CPAs in the North ABQ area weigh in on preparing a worksheet:
The preparation of the worksheet provides a quick review of all of the ledger balances as well as the adjusting journal entries.
- The trial balance is prepared in pencil directly on the worksheet.
- The adjusting entries are then prepared in the Adjustments column for review by a CPA firm.
- The accountant will then check to see whether the debits equal the credits. If the debits do not equal the credits, the error must first be found before any further work can be done on the worksheet. This is a CPA best practice.
- The columns of a typical worksheet appear in the following order: trial balance, adjustments, adjusted trial balance, income statement and balance sheet.