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Bookkeeping › Trial Balance

What comes after the trial balance in the accounting cycle?

Beginner

Answer

After the trial balance, period-end adjustments are made (accruals, prepayments, depreciation, closing inventory, provisions), then the income statement (profit or loss) and the balance sheet (statement of financial position) are prepared. The trial balance is the bridge from the ledgers to the financial statements.
Real-world example Once the trial balance is extracted and adjusted, the bookkeeper prepares the profit and loss and balance sheet.

Common follow-ups: What adjustments follow the TB? | Which statements are produced?