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. The purpose of the trial balance is to ensure that the total debits equal the total credits in the ledger accounts.
Here's how you can proceed to prepare an unadjusted trial balance at the end of July:
1. Gather all ledger account balances:
Collect the ending balances of all the ledger accounts, which may include assets, liabilities, equity, revenues, and expenses.
2. Organize the accounts:
Arrange the ledger account balances in the trial balance format. Typically, you list the account titles in the left column and the corresponding balances (debit or credit) in the right columns.
3. Include all account balances:
Record the account balances for all ledger accounts, even if there was no activity in July. This ensures that all accounts are included in the trial balance.
4. Determine the debit and credit totals:
Add up the debit balances and credit balances separately to calculate the total debits and total credits.
5. Verify equality of debits and credits:
Check if the total debits equal the total credits. If they do, this indicates that the books are mathematically balanced.
Remember, the unadjusted trial balance is prepared before any adjustments are made to the accounts. It is a starting point for further financial analysis and adjustments.