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Accounting Allah shmoop trialled Balances and account adjustments All right

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Well a trial balance isn't a German judge making Franz

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Kafka stand on a high wire Okay Yeah some jokes

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we do Just for the eight English majors out there

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who watch this anyway A trial balance is a reflection

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of the process of finding absolute cross checked accuracy when

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reconcile ing revenues and expenses on the income statement along

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with changes in assets liabilities in cash You know for

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a given period Well the eventual correct answer often takes

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multiple iterations to derive Why Bob from Supply forgot to

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submit his receipt for the four thousand pencils he ordered

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from the kindly loving folk at Dixon Ticonderoga Betty on

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the loading dock miscounted the number of plastic pipes delivered

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from the plumbing supply fixer to of the checks made

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out to the company in payments for basketballs Just like

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the basketballs bounced The process of trialling a balance allows

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the accountant a level or two deeper inspection on the

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data thus making the process of error correction easier Yes

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it's a pain but it's way easier than the Russian

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method right here Yeah involves blindfold and darks Well the

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focus here is on the actual mental and physical process

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of accounting where accounting is a kind of verb In

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real life Transactions don't happen in such a way so

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that they conveniently conform to an accountant's time schedule in

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process of adding up beans In reality a given day

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might show four bills being paid before ten a M

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then around eleven Three sales were made by noon A

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lawsuit was filed which would be a contingent Liability at

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was filed against company in the afternoon while the company

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received a bunch of lumber and this was unfortunate because

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this is a semiconductor company which has no use for

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lumber so they have to send it back and figure

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out why someone sent them a bunch of lumber Then

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by the end of the day well a few more

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bills get paid A few more invoices get collected in

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all of these events are journal or tract and retract

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and written down in a nice tidy row from top

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to bottom Okay so what is journal entry bookkeeping Think

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of journal entries in the accounting world as journal entries

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in an obsessive life assessing teens diary where every little

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detail of the day is written and recorded carefully So

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in the event of a company paying his rent for

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example well it sends out sixteen thousand two hundred dollars

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and books or journals has a very short term asset

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The ability to inhabit the twelve thousand square feet of

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rented warehouse space in which it runs its business The

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basic idea is that the company keeps a financial diary

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or journal for each and every little financial activity that

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it incurs In essence what happens when a financial event

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occurs is that the accountant or bookkeeper enters it twice

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The first entry focuses on the effect of the event

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as an asset and the second as a liability Hence

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the notion of yes double entry bookkeeping Well why do

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they do this Well because errors are less prone to

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happen when Big Brother is always looking over your shoulder

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and making me all nervous In the case of assessing

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rent for example the entry would look something like this

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Got prepaid ran sixteen thousand years Devon there in cash

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one out the door of the sixteen thousand two hundred

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right As long as everything balances you're good But at

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least you'll have given yourself a chance to catch any

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errors Long's your religious about journal entering every single little

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thing and cross checking it Be sure everything was added

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up Onda counted properly because well it's always a smart 00:03:30.768 --> [endTime] idea to operate with a safety net

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