Unadjusted Trial Balance: Example and What to Check Before Adjusting

Key Takeaways

There is a point in every close where the transactions are in, the bank is reconciled, and nobody has touched an adjusting entry yet. That is the moment to run the unadjusted trial balance. It is quick to produce, and it tells you whether the ledger is a sound base for the adjustments that follow.

Here is what the report shows, what to check before you adjust anything, and what to do when it does not balance.

What Is an Unadjusted Trial Balance?

An unadjusted trial balance lists every general ledger account and its balance at period end, before any adjusting entries are posted. Debit balances go in one column and credit balances in the other, and the two totals should agree.

It reflects transactions as they were recorded, which means invoices, bills, payments and bank activity. It does not yet include accruals, deferrals or depreciation. For a general overview of trial balances, see our trial balance glossary page. This post covers the unadjusted version and how to use it as the starting point of a close.

Unadjusted Trial Balance Example

Take a residential cleaning company at September 30, the end of a quarter. These are the balances straight from the ledger, before any adjustments.

The totals agree at $190,700, so the ledger is in balance and ready for adjustments. On these figures, revenue of $142,000 less expenses of $95,600 gives net income of $46,400. That number is not final, and the rest of this post explains why.

Why Prepare an Unadjusted Trial Balance?

It does three jobs. It proves the ledger balances before you build on it. It gives the reviewer a single page to scan for balances that look wrong. And it shows what will need adjusting. A prepaid balance that was never released is one example. A fixed asset with no depreciation this period is another.

Skipping it means you find a ledger problem after the adjustments are in, when it is much harder to tell which entry caused it.

What to Check Before You Post Adjustments

The report balancing is the minimum. A reviewer should also confirm that the underlying data is complete.

These checks are quick on one client. Across a full client list, the order matters: reconcile first, then run the report, then review it. Running the trial balance before the reconciliations are done produces a report that will have to be rebuilt.

What If the Unadjusted Trial Balance Does Not Balance?

An out-of-balance report means the ledger itself has a problem. Total debits do not equal total credits, so something was recorded with one side missing or entered incorrectly. Modern accounting software rarely lets a one-sided entry through, so look first at the usual causes:

Suppose the cleaning company's fuel expense of $7,100 had been copied into the worksheet as $7,010. Debits would total $190,610 against credits of $190,700, a $90 difference. Ninety is divisible by 9, which points to a transposition, and the digits in the fuel line are the first place to look.

Fix the cause before you adjust. An adjusting entry will not repair an out-of-balance ledger, and it will make the original problem harder to trace.

What the Unadjusted Trial Balance Cannot Catch

This is the limit of the report. Equal totals prove the arithmetic. They say nothing about whether the right entries exist. In the example, the report balances even though:

None of these breaks the balance, because each is an entry that was never made. This is why the review step matters, and why the next stage of the close is adjustments.

Who Prepares It and When?

The bookkeeper or senior bookkeeper normally runs the unadjusted trial balance once reconciliations are done, and a reviewer looks at it before adjustments begin. For firms that close monthly, it is a monthly step. For clients who only need year-end statements, it is a single report, which is why year-end files tend to carry more surprises. A balance that was off in March is still off in December, only harder to trace.

Running it every month, even for clients who do not need monthly statements, spreads the cleanup across the year. It also gives you a prior-month report to compare against, and that comparison is where most unusual balances show up.

Unadjusted vs Adjusted Trial Balance

The two reports use the same format. What changes is the content, and the gap between them is the work the adjusting entries did.

From Unadjusted Trial Balance to Adjusting Entries

Use the unadjusted report to build the list of adjustments. For the cleaning company, a first pass gives three:

Together these add $6,350 of expense, so net income falls from $46,400 to $40,050. The adjusting entries guide covers how to calculate and post each type. Once they are posted, you total the accounts again to produce the adjusted trial balance. That version feeds the financial statements.

For where this step sits in the full sequence, see the month-end close guide.

Unadjusted Trial Balance in QuickBooks Online and Xero

Both platforms produce a trial balance report as of a date you choose. Run it after reconciliations are complete and before posting adjusting journal entries, and save or export it so you can compare it with the adjusted version later. Report names and options vary by version, so confirm the current steps in each platform's help documentation.

Neither platform checks whether a report is complete. It shows what has been recorded, so completeness is a review decision.

How Xenett Can Help

The unadjusted trial balance shows balances. It does not show what is behind them. Xenett's AI Financial Review scans the general ledger against 50+ review points, native to QuickBooks Online and Xero, and flags items such as uncategorized entries, duplicates and unusual balances before you start adjusting. AI Accruals surfaces prepaid, payroll and deferred revenue items that are likely to need an entry.

The decisions stay with you. The difference is that the adjusting entries start from a ledger you have already checked, not one you hope is clean.

Conclusion

The unadjusted trial balance is the first checkpoint of the period-end cycle. Reconcile first, run the report, confirm it balances, and scan it for balances that look wrong. Then use it to list the adjustments the books still need. A balanced report is the starting point and not the finish.

If you want that review built into your close, start your 14-day free trial (no credit card, setup in under 10 minutes) or book a 15-minute demo.

FAQ: Unadjusted Trial Balance

What is an unadjusted trial balance?

An unadjusted trial balance is a list of all general ledger accounts and their balances at period end, prepared before adjusting entries are posted. Total debits should equal total credits.

What is the purpose of an unadjusted trial balance?

Its purpose is to confirm the ledger balances before adjustments are made and to show which accounts still need adjusting. It is the starting point for the adjusting entries and the adjusted trial balance.

What is the difference between unadjusted and adjusted trial balance?

The unadjusted trial balance is prepared before adjusting entries and the adjusted one after. The adjusted version includes accruals, deferrals and depreciation, and it is the one used to build the financial statements.

What accounts are included in an unadjusted trial balance?

It includes every general ledger account with a balance: assets, liabilities, equity, revenue and expenses. Accounts that only appear after adjusting, such as Depreciation Expense or Wages Payable, are usually not on it yet.

What if the unadjusted trial balance does not balance?

Find and fix the cause before posting adjustments. Common causes are transposed digits, a balance in the wrong column, an omitted account, or data from a conversion. A difference divisible by 9 often points to a transposition.

Can an unadjusted trial balance balance and still be wrong?

Yes. It only proves debits equal credits. A missing accrual, an unreleased prepaid or a skipped depreciation entry still balances, which is why the report needs review as well as totaling.

Is the unadjusted trial balance the same as the general ledger?

No. The general ledger holds every transaction by account. The unadjusted trial balance summarizes only the ending balance of each account at a point in time.