I am working on an unadjusted trial balance and the assignment says to prepare one for the end of July. Do I use ALL ledger accounts even if there was no activity in July? OR do I just use the July accounts?
To prepare an unadjusted trial balance for the end of July, you typically include all ledger accounts regardless of whether there was any activity in July.
Here's how you can do it step by step:
1. Gather all your ledger accounts: Take a look at your general ledger, which should have a list of all your accounts, such as Cash, Accounts Receivable, Accounts Payable, etc. Make sure you have the balances of these accounts as of the end of July.
2. Include all ledger accounts: As mentioned earlier, you'll want to include all the ledger accounts, even if there was no activity in July. This is because the purpose of the unadjusted trial balance is to ensure that all the debit balances equal the credit balances at a specific point in time, regardless of activity.
3. Record the account balances: Write down the name of each account in the left-hand column of a trial balance worksheet. In the next two columns, record the account balances, with the debit balances in the debit column and the credit balances in the credit column. Be sure to note the balances as of the end of July.
4. Calculate the total debits and credits: Sum up the debit column and the credit column separately to calculate their totals.
5. Verify equality: Finally, compare the total debits and credits. If they are equal, congratulations! You have successfully prepared an unadjusted trial balance for the end of July. If the totals do not match, you may need to review the entries or balances to identify any errors or omissions.
Remember, the unadjusted trial balance is a preliminary step in the accounting cycle and is used to ensure the accuracy of your accounts before further adjustments are made.