--- title: Unadjusted Trial Balance | Example, Purpose, Preparation, Errors description: An unadjusted trial balance is usually the third step in the accounting cycle and is prepared before any adjusting entries are made. --- [![Carbon collective](https://www.carboncollectiveinvesting.com/hubfs/raw_assets/public/CarbonCollective_August2021%20copy/images/carbon-collective-green-investing-logo-white.4f6047d4.svg "Carbon collective")](https://www.carboncollectiveinvesting.com/) - About - Employers - [Sustainable 401(k)](https://www.carboncollectiveinvesting.com/401k) - [401(k) Comparison Tool](https://www.carboncollectiveinvesting.com/401k/plan-comparison-tool) - Individuals - [FAQ](https://www.carboncollective.co/en/knowledge/faqs) - [ETF](https://www.carboncollectivefunds.com/) - Learn - [Sustainable Investing](https://www.carboncollective.co/sustainable-investing) - [Investing Basics](https://www.carboncollective.co/sustainable-investing/investing-basics) - [Blog](https://blog.carboncollective.co/) - [Tools](https://tools.carboncollective.co/calculator/) - Log in - [Carbon Collective](https://app.carboncollective.co) - [Altruist](https://app.altruist.com) [Talk to a human](https://ask.carboncollective.co/f4o5dylkg) [Sign up](https://app.carboncollective.co/sign-up) [Log In](http://app.carboncollective.co/) [![Carbon collective](https://www.carboncollectiveinvesting.com/hubfs/raw_assets/public/CarbonCollective_August2021%20copy/images/carbon-collective-green-investing-logo.53b28bee.svg "Carbon collective")](https://www.carboncollectiveinvesting.com/) - About - Employers - [Sustainable 401(k)](https://www.carboncollectiveinvesting.com/401k) - [401(k) Comparison Tool](https://www.carboncollectiveinvesting.com/401k/plan-comparison-tool) - Individuals - [FAQ](https://www.carboncollective.co/en/knowledge/faqs) - [ETF](https://www.carboncollectivefunds.com/) - Learn - [Sustainable Investing](https://www.carboncollective.co/sustainable-investing) - [Investing Basics](https://www.carboncollective.co/sustainable-investing/investing-basics) - [Blog](https://blog.carboncollective.co/) - [Tools](https://tools.carboncollective.co/calculator/) - Log in - [Carbon Collective](https://app.carboncollective.co) - [Altruist](https://app.altruist.com) [Talk to a human](https://ask.carboncollective.co/f4o5dylkg) [Sign up](https://app.carboncollective.co/sign-up) [Log In](http://app.carboncollective.co/) **[Home](https://www.carboncollectiveinvesting.com/) > [Sustainable Investing](https://www.carboncollectiveinvesting.com/sustainable-investing) >** Unadjusted Trial Balance # Unadjusted Trial Balance ![](https://www.carboncollectiveinvesting.com/hubfs/Brooke%20Tomasetti.png) Written by Brooke Tomasetti | Reviewed by [Subject Matter Experts](https://www.carboncollectiveinvesting.com/subject-matter-experts) Updated on October 1, 2024 Fact Checked Why Trust Carbon Collective? ### Table of Contents An unadjusted trial balance is usually the third step in the accounting cycle and is prepared before any adjusting entries are made. It is a report that lists the balances of all the individual [t-accounts](https://www.carboncollectiveinvesting.com/sustainable-investing/t-accounts/) of the general ledger at a specific point in time. This is perhaps one of the simplest steps of the accounting cycle as it just requires the bookkeeper to compile the separate balances in one report. ## The Accounting Cycle Example Throughout this series on the accounting cycle, we will look at an example business, Bob’s Donut Shoppe, Inc., to help understand the concepts of each part of the accounting cycle. Below is the complete list of accounting cycle tutorials: 1. [Journal Entries](https://www.carboncollectiveinvesting.com/sustainable-investing/journal-entries/) 2. [T-Accounts](https://www.carboncollectiveinvesting.com/sustainable-investing/t-accounts/) 3. **Unadjusted Trial Balance (you are here)** 4. [Adjusting Entries](https://www.carboncollectiveinvesting.com/sustainable-investing/adjusting-entries/) 5. [Adjusted Trial Balance](https://www.carboncollectiveinvesting.com/sustainable-investing/adjusted-trial-balance/) 6. [Preparing Financial Statements](https://www.carboncollectiveinvesting.com/sustainable-investing/preparing-financial-statements/) 7. [Accounting Worksheet](https://www.carboncollectiveinvesting.com/sustainable-investing/accounting-worksheet/) 8. [Closing Entries](https://www.carboncollectiveinvesting.com/sustainable-investing/closing-entries/) 9. [Income Summary Account](https://www.carboncollectiveinvesting.com/sustainable-investing/income-summary-account/) 10. [Post-Closing Trial Balance](https://www.carboncollectiveinvesting.com/sustainable-investing/post-closing-trial-balance/) 11. [Reversing Entries](https://www.carboncollectiveinvesting.com/sustainable-investing/reversing-entries/) We also have an accompanying spreadsheet that shows you an example of each step. [Click here to download the Accounting Cycle template](https://www.carboncollectiveinvesting.com/hubfs/Bobs-Donut-Shoppe-Apr-23-2022-04-10-47-91-PM.xlsx) ## Unadjusted Trial Balance Purpose The unadjusted trial balance serves the following purposes: - **Detection of any errors:** The totals of debit column will not match the total of the credit column if there has been an error in recording or posting any journal entry up till this point. - **Management use:**  It is usually used internally and is not for official distribution outside the company. The company can use this report to evaluate at a high level the financial position of a company. It will help address some questions like how much cash is available, the situation with debtors and creditors, total expenses paid, etc. In its initial form, this report will not be suitable to be used for preparing the [financial statements](https://www.carboncollectiveinvesting.com/sustainable-investing/basic-financial-statements/) like Income statements or Balance sheet as it won’t comply with the accounting standard frameworks like US GAAP or IFRS. This trial balance will be prepared once again after all adjusting entries have been posted and then that report will be called an adjusted trial balance. Therefore, the unadjusted trial balance will serve as a foundation upon which the rest of the steps of the accounting cycle will take place. ## Unadjusted Trial Balance Preparation The unadjusted trial balance has three columns: - Account names in the first column - Debit balances as of the second column - Credit balances as of the third column It is a common practice to list the account names in the order they appear on the general ledger by their respective account numbers. Most accounts are numbered in the order they are displayed on the balance sheet. This means that assets accounts would come first, followed by liabilities and equity accounts, and then ending with the revenues and expenses accounts. The total of the debit and credit columns is reflected at the bottom of the trial balance. Both the total should match as is the case with an accounting equation. If they do not match, this implies that either the unadjusted trial balance has been incorrectly prepared, the journal entries were wrongly made, or the journal entries were posted erroneously. The unadjusted trial balance should always be given a proper heading. This usually consists of the company name in the first line, the name of the trial balance in the second, and the reporting period date in the third. The format for the proper heading is given below: **Company A** Unadjusted Trial Balance January 21, 2020 ## Unadjusted Trial Balance Errors ### Does Not Balance If the totals of debit and credit columns of the unadjusted trial balance do not balance, one of the following errors might have occurred: 1. A debit amount is erroneously posted as a credit amount or vice versa. 2. The balances of the t-accounts are incorrect. 3. The debit and credit columns of the unadjusted trial balance have been totaled wrong. 4. One or more of the individual ledger account balances have not been listed in the trial balance report. 5. Duplication in the listing of one of the individual account balances. The above are the most common errors that occur due to which the trial balance does not balance. However, this is not an exhaustive list and there are a variety of other factors which could result in a mismatch. ### Does Balance There can be a situation where the bookkeeper has made errors in either of the preceding steps of the accounting cycle, but the unadjusted trial balance still balances. This could be due to a variety of factors as identified below: 1. **Error of omission:** A journal entry for a transaction has been completely missed out on. 2. **Principle error:** A transaction has been incorrectly journalized. For instance, payment of rent could have been treated as a payment for office supplies. 3. **Error of original entry:** Both the debit and credit amounts of the journal entry has been overstated. Another situation exists where both the debit and credit amounts of the journal entry have been understated. 4. **Error of reversal:** When the amounts are correct, but the account that should have been debited has been credited and the account that should have been credited has been debited. 5. **Commission error:** An incorrect account has been debited or credited. This is the same as principle error in its nature. Principle error occurs due to a lack of accounting knowledge whereas a commission error occurs due to a mistake or oversight. 6. **Duplication** in the listing of multiple the individual account balances. So the quick rule of thumb here is: - If the trial balance does not balance, there is an error somewhere - If the trial balance does balance, an error might still exist but it wouldn’t be quite so obvious as an unbalance ## Unadjusted Trial Balance Example Continuing with the books of Bob and his company, Bob’s Donut Shoppe, the next step for his bookkeeper after preparing the ledger accounts is to create an unadjusted trial balance. His unadjusted trial balance for the given period is given below: ![Unadjusted Trial Balance](https://www.carboncollectiveinvesting.com/hs-fs/hubfs/Unadjusted%20Trial%20Balance.png?width=810&name=Unadjusted%20Trial%20Balance.png) ## Next Step As you can see, the totals of debit columns and credit columns balance. However, this still does not mean that an error could not exist. The bookkeeper should examine the accounts thoroughly again before proceeding to the next step of creating adjusting entries for the period.   ## FAQs ### 1. What is an unadjusted trial balance? An unadjusted trial balance is a list of all the general ledger account balances as of a certain date. The purpose of creating this report is to ensure that the debits and credits for each account are correctly balanced. If they are not, it will be immediately apparent and can help to diagnose where the error might have occurred. The unadjusted trial balance is created before any adjusting entries are made, which is why it is also known as the unadjusted trial balance errors. ### 2. If an unadjusted trial balance is “balanced”, does that mean that it is error-free? An unadjusted trial balance is not necessarily error-free. It is simply a report that shows all the debit and credit balances for each general ledger account as of a certain date. An unadjusted trial balance can be balanced even if there are errors in the bookkeeping process, such as incorrect journal entries or incorrect account debits and credits. ### 3. What is the purpose of an unadjusted trial balance? The purpose of an unadjusted trial balance is to ensure that the debits and credits for each account are correctly balanced. If they are not, it will be immediately apparent and can help to diagnose where the error might have occurred. The unadjusted trial balance is created before any adjusting entries are made, which is why it is also known as the unadjusted trial balance errors. ### 4. How is the unadjusted trial balance prepared? The unadjusted trial balance is prepared by compiling a list of all the general ledger account balances as of a certain date. This can be done manually or using a software program. Once the list is compiled, the totals for debit columns and credit columns should be balanced. If they are not, it indicates that there is an error in the bookkeeping process. ### 5. What is the difference between the unadjusted trial balance and the adjusted trial balance? The unadjusted trial balance is a list of all the general ledger account balances as of a certain date. The adjusted trial balance is a list of all the general ledger account balances after all the adjusting entries have been made. ### Related Topics - [Sustainable 401(k) Plan](https://www.carboncollective.co/401k) - [Sustainable Investing](https://www.carboncollective.co/sustainable-investing/) - [Investing Basics](https://www.carboncollective.co/sustainable-investing/investing-basics) - [Retirement Glossary](https://www.carboncollective.co/sustainable-investing/retirement-planning-glossary) - [Best Retirement Plans](https://www.carboncollective.co/sustainable-investing/the-10-best-retirement-plans) - [Wealth Manager Vs Financial Advisor](https://www.carboncollective.co/sustainable-investing/wealth-manager-vs.-financial-advisor) ![Attend Our Next Webinar](https://www.carboncollectiveinvesting.com/hubfs/carbon-collective-green-investing-icon-webinar.12af7b6e.svg) ### Attend Our Next Webinar Join our next Sustainable Investing 101 webinar, get our favorite DIY options, and walk through how we build our portfolios. [Watch Now](https://www.carboncollective.co/sustainable-investing-webinar-green-retirement-month) ![Get Our Newsletter](https://www.carboncollectiveinvesting.com/hubfs/carbon-collective-green-investing-icon-demo.6ed28722.svg) ### Get Our Newsletter Go a level deeper with us and investigate the potential impacts of climate change on investments like your retirement account. Join Newsletter ![close-typeform](data:image/gif;base64,R0lGODlhEQARAIAAAODn7P///yH5BAEHAAEALAAAAAARABEAAAIqBIKpab3v3EMyVHWtWZluf0za0XFNKDJfCq5i5JpomdUxqKLQVmInqyoAADs=) ![Talk To A Human](https://www.carboncollectiveinvesting.com/hubfs/carbon-collective-green-investing-icon-chat.49d48c5b.svg) ### Talk To A Human Joining a new investment service can be intimidating. We’re here for you. Click below to email us a question or book a quick call. [Ask a Question](https://ask.carboncollective.co/f70pooobq) Topics ## Sustainable Investing Topics View our list of some topics below. See More - Portfolios - [Performance](https://www.carboncollectiveinvesting.com/returns) - About - [Sustainable 401(k)](https://www.carboncollectiveinvesting.com/401k) - Learn - [FAQ](https://www.carboncollective.co/en/knowledge/faqs) - [Sustainable Investing](https://www.carboncollective.co/sustainable-investing) - [Investing Basics](https://www.carboncollective.co/sustainable-investing/investing-basics) - Contact - [Contact us](mailto:hello@carboncollective.co) - [Legal](https://www.carboncollective.co/legal) - [Privacy Policy](https://www.carboncollectiveinvesting.com/hubfs/2022-11%20Carbon%20Collective%20Privacy%20Policy.pdf) - [Back to top](https://www.carboncollectiveinvesting.com/sustainable-investing/unadjusted-trial-balance#top-of-page) DISCLAIMERS: Advisory services provided by Carbon Collective Investment LLC (“Carbon Collective"), an SEC-registered investment adviser. A copy of Carbon Collective's current written disclosure statement discussing Carbon Collective’s business operations, services, and fees is available at the SEC’s investment adviser public information website – [www.adviserinfo.sec.gov](https://adviserinfo.sec.gov/firm/summary/310129) or [our legal documents here](https://blog.carboncollective.co/legal-documents/). The articles and research support materials available on this site are educational and are not intended to be investment or tax advice. Carbon Collective does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Carbon Collective’s web site or incorporated herein, and takes no responsibility therefor. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Investments in securities: Not FDIC Insured • No Bank Guarantee • May Lose Value. Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. Before investing, consider your investment objectives and Carbon Collective's charges and expenses. Carbon Collective's internet-based advisory services are designed to assist clients in achieving discrete financial goals. They are not intended to provide comprehensive tax advice or financial planning with respect to every aspect of a client's financial situation and do not incorporate specific investments that clients hold elsewhere. For more details, see our Form CRS, Form ADV Part 2 and other disclosures. Past performance does not guarantee future results, and the likelihood of investment outcomes are hypothetical in nature. Not an offer, solicitation of an offer, or advice to buy or sell securities in jurisdictions where Carbon Collective is not registered. © 2026 Carbon Collective Corporation. All rights reserved. × #### Fact Checked Carbon Collective partners with financial and climate experts to ensure the accuracy of our content. Our team of reviewers are established professionals with years of experience in areas of personal finance and climate. They have contributed to top tier financial publications, such as Reuters, Axios, Ag Funder News, Bloomberg, Marketwatch, Yahoo! Finance, and many others. This team of experts helps Carbon Collective maintain the highest level of accuracy and professionalism possible. × #### Why Trust Carbon Collective Carbon Collective is the first online investment advisor 100% focused on solving climate change. We believe that sustainable investing is not just an important climate solution, but a smart way to invest. We follow ethical journalism practices, which includes presenting unbiased information and citing reliable, attributed resources. Much of our research comes from leading organizations in the climate space, such as Project Drawdown and the International Energy Agency (IEA). Our goal is to deliver the most understandable and comprehensive explanations of climate and finance topics. Our writing and editorial staff are a team of experts holding advanced financial designations and have written for most major financial media publications. Our work has been directly cited by organizations including MarketWatch, Bloomberg, Axios, TechCrunch, Forbes, NerdWallet, GreenBiz, Reuters, and many others. We strive to empower readers with the most factual and reliable climate finance information possible to help them make informed decisions. } ```json { "@context" : "https://schema.org", "@type" : "Organization", "alternateName" : "Carbon Collective", "contactPoint" : { "@type" : "ContactPoint", "areaServed" : "US", "availableLanguage" : "en", "contactType" : "customer service", "telephone" : "(650) 868-2697" }, "logo" : "https://www.carboncollective.co/hubfs/CarbonCollectiveLogo.png", "name" : "Carbon Collective Investing LLC", "sameAs" : [ "https://www.facebook.com/carboncollectiveinvesting/", "https://twitter.com/carbncollective", "https://www.instagram.com/carbon.collective/", "https://www.youtube.com/channel/UC769Y-F-L_B37kyQfdpvyXA", "https://www.linkedin.com/company/carbon-collective/", "https://www.crunchbase.com/organization/carbon-collective", "https://adviserinfo.sec.gov/firm/summary/310129", "https://www.wikidata.org/wiki/Q110243690" ], "url" : "https://www.carboncollective.co/" } ``` ```json { "@context" : "https://schema.org", "@type" : "FAQPage", "mainEntity" : [ { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "An unadjusted trial balance is a list of all the general ledger account balances as of a certain date. The purpose of creating this report is to ensure that the debits and credits for each account are correctly balanced. If they are not, it will be immediately apparent and can help to diagnose where the error might have occurred. The unadjusted trial balance is created before any adjusting entries are made, which is why it is also known as the unadjusted trial balance errors." }, "name" : "What is an unadjusted trial balance?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "An unadjusted trial balance is not necessarily error-free. It is simply a report that shows all the debit and credit balances for each general ledger account as of a certain date. An unadjusted trial balance can be balanced even if there are errors in the bookkeeping process, such as incorrect journal entries or incorrect account debits and credits." }, "name" : "If an unadjusted trial balance is “balanced”, does that mean that it is error-free?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "The purpose of unadjusted trial balance is to ensure that the debits and credits for each account are correctly balanced. If they are not, it will be immediately apparent and can help to diagnose where the error might have occurred. The unadjusted trial balance is created before any adjusting entries are made, which is why it is also known as the unadjusted trial balance errors." }, "name" : "What is the purpose of unadjusted trial balance?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "The unadjusted trial balance is prepared by compiling a list of all the general ledger account balances as of a certain date. This can be done manually or through the use of a software program. Once the list is compiled, the totals for debit columns and credit columns should be balanced. If they are not, it indicates that there is an error in the bookkeeping process." }, "name" : "How is unadjusted trial balance prepared?" }, { "@type" : "Question", "acceptedAnswer" : { "@type" : "Answer", "text" : "The unadjusted trial balance is a list of all the general ledger account balances as of a certain date. The adjusted trial balance is a list of all the general ledger account balances after all the adjusting entries have been made." }, "name" : "What is the difference between unadjusted trial balance and the adjusted trial balance?" } ] } ``` ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "https://20345524.fs1.hubspotusercontent-na1.net/hubfs/20345524/Brooke%20Tomasetti.png", "url" : "https://www.carboncollectiveinvesting.com/sustainable-investing/author/brooke-tomasetti" }, "dateModified" : "2024-10-01", "datePublished" : "2021-03-24", "description" : "An unadjusted trial balance is usually the third step in the accounting cycle and is prepared before any adjusting entries are made.", "headline" : "Unadjusted Trial Balance | Example, Purpose, Preparation, Errors", "image" : "", "mainEntityOfPage" : { "@id" : "https://www.carboncollectiveinvesting.com/sustainable-investing/unadjusted-trial-balance", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://www.carboncollective.co/hubfs/CarbonCollectiveLogo.png" }, "name" : "Carbon Collective" } } ```