details the figures from our double entry bookkeeping accounts and is used to
form our Profit and loss and Trial Balance. A simple trial balance will have
two columns for figures to be entered a Debit and a Credit column.
we wish to adjust our figures in our trial balance we create an extended trial
balance (abbreviated to ETB).
Demonstrate this below
shows a simple Trial Balance however we look and notice no drawings and a very
large petty cash account balance, we speak to our client and he said ‘I took
£300 per week but didn’t take and money for two weeks in February as business
was slow there was no money to pay me, but I forgot to tell you’, trust me you
will hear things like this a lot.
now know for 50 weeks he took £300 per week which is £15000.
need to adjust our trial balance to get an extended trial balance so we can
prepare our Profit and Loss Account and Balance Sheet.
is no limit to the number of adjustment columns you have. You may need to make
adjustments for Accruals/Prepayments, Bad debts etc. There was none in this
example (you may indeed need no adjustments because your bookkeeping entries
included all these entries or indeed there may be none to record)