What is the effect of an adjusting journal entry on the trial balance?
Practice Questions
1 question
Q1
What is the effect of an adjusting journal entry on the trial balance?
It does not affect the trial balance
It increases total debits
It increases total credits
It balances the trial balance
An adjusting journal entry does not affect the overall balance of the trial balance; it adjusts the individual accounts.
Questions & Step-by-step Solutions
1 item
Q
Q: What is the effect of an adjusting journal entry on the trial balance?
Solution: An adjusting journal entry does not affect the overall balance of the trial balance; it adjusts the individual accounts.
Steps: 5
Step 1: Understand what a trial balance is. A trial balance is a list of all the accounts in the accounting system and their balances.
Step 2: Know what an adjusting journal entry is. It is an entry made at the end of an accounting period to update account balances.
Step 3: Realize that adjusting journal entries change the balances of specific accounts, like expenses or revenues.
Step 4: Remember that the total of debits must equal the total of credits in the trial balance.
Step 5: Understand that when you make an adjusting journal entry, it does not change the overall total of the trial balance; it only redistributes the amounts among the accounts.
