list of all accts and their DR and CR balance. usually prepared at the end of an accounting period

1list acct titles with balances in appropriate DR/CR column

2total the DR/CR columns

3prove the 2 columns are =

-a trial balance does not prove that all transations are recorded or that the ledger is correct

not a finanical statement, but looks like one

used to check whether bookkeeping has been done accurately

1. Deferrals

-Prepaid Expenses: paid in cash beore used/consumed

-Unearned Revenues: cash recieved before services are performed

2. Accruals

-Accrued Revenues: revenues for services performed, but not yet received in cash or recorded

-Accrued Expenses: expenses incurred but not yet paid in cash or recorded

expenses or revenues that are recofnized at a date later than the point when cashe was originally exchanged

1. prepaid expenses

2. unearned revenues

assets paid for and recorded before a company uses them

-when exp. are prepaid, you debit an asset acct to show the service/benefit it will recieve in the future.

examples of common pre-pymts: insurance, supplies, advertising, rent, purchasing buildings/equipment

costs that expire with passage of time (rent/insurance) or use/consumption (supplies)

adj entry for prepaid exp: debit to expense cct, credit to asset acct

when companies receive cash before services are performed, they record a liability by increasing (crediting) a liability acct called unearned revenues

adj. entry for unearned revenues results in a DR (decrease) to a liability acct and CR (increase) to a revenue acct

1. bring the carious balance sheet accounts up do date

2. record the proper amount of revenues and exps in appropriate acct period

2 broad categoies

1. debits to exp accts, coupled with CR to either an asset or liability acct

2. CR to revenue, coupled with DR to liability or asset acct