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    des arnett's Avatar
    des arnett Posts: 2, Reputation: 1
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    #1

    Aug 1, 2009, 07:54 AM
    Unadjusted trial balances
    If an unadjusted trial balance sheet showed a total of $200,020 and you had to add revenue of $2,000 and expenses of $1,000, what would be new total balanceQ
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Aug 1, 2009, 06:50 PM

    It doesn't work that way. If you have revenue of $2000, then you have something else to match it. If you have expenses of $1000 then you have something else to match that. Everything has to continue to balance - all entries must have equal debits & credits. Any entry you make could increase both columns, decrease both columns, or just net out and be the same thing.

    The thing about a trial balance is that it's a little weird to think about the effect on the total of the columns. And you can't know by only knowing one side of an entry. Adding expenses will increase the debit side. However, without knowing what the other part of that entry is, no way to know how else it might be affected. If I assume that those are accrued expenses you're doing, then the other side should be payables, which would increase the credit side. However, it is technically possible to credit a debit account instead, which would reduce the debit side, and that would net out the increase of the expense debit.

    You shouldn't have a concern about what effect some entry has on the trial balance. Those totals don't really have any meaning, other than that they should balance. The actual number means nothing. And the effect on the total of the columns is not the same thing as the effect on the individual account.

    If you want to know what an entry does, make the entry and re-balance the involved accounts, and add it all up again. That's generally what the rest of us do.
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
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    #3

    Aug 2, 2009, 05:13 AM

    I didn't realize this was a 'double poster' when I responded to this question's twin a moment ago.

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