What accounts go onto the trial balance column of the accounting worksheet?

Question

I see that the debit and credit balances for the trial balances are footed in the worksheet to check that they balance. Then the adjustments column has additional accounts, mostly expenses, revenues and payables. But what determines why those accounts don't just appear in the trial balance?

Answer 1

The trial balance should contain every account in the accounting system. This includes assets, liabilities, capital, revenue, expense, gains, and losses accounts. As you state, the purpose is to ensure that the accounts are in balance, i.e. total debits equal total credits.

Some accounts are not maintained in the accounting system but are only created when adjustments are made. For example, all supplies bought by the company may be recorded in a supplies expense account. At the end of the accounting period, some of the supplies are unused. That means they are not yet expenses but are assets. So the adjusting entry is to reduce the supplies expense with a credit and create a Prepaid Supplies account whose debit balance will be the cost of the unused supplies. This is an example of a deferral. The using up of the supplies is deferred until the next accounting period. Other examples include salary and wages expense, where some salaries and wages have been earned by employees but are not yet recorded because payday is a few days later. Debiting the salaries expense account for the unpaid salaries requires crediting a Salaries Payable liability account, which is normally not maintained in the accounting system throughout the year. This is an example of an accrual. The salaries are accrued but not yet paid. Similar accounts that are created at the end of the year include accruals and deferrals of revenues. Next month's rent revenue was received from a tenant and recorded as rent revenue, but it will only be earned next month. It is deferred as Unearned Rent, a liability account, and removed from the rent revenue account in the adjusting process.