Extended Trial Balance

After a Trial Balance has been drawn (prepared), there is usually the need to make adjustment(s) in line with any additional information that may be made available. For instance, out of the expenses stated in the debit side of the trial balance, some may have element of prepayment, some may have accrued portion that is not declared by the trial balance, and some information may have been completely omitted from the prepared trial balance. For example, we have the following trial balance. 

And we are further told that closing stock as at 31^stDecember, 20x7 is N5,230.

To treat this closing stock, we introduce two additional columns to to the original trial balance

To incorporate any additional information not disclosed by the trial balance, it is necessary to add additional columns (called adjustment columns) to the trial balance to provide for the accounting treatment of the said additional information. When this is done, we have what is referred to as adjusted trial balance. Example is shown below 

In practice, practicing accountants and auditors prefer to use this adjusted trial balance in preparing the accounts of their clients. To do this, more columns are added to the trial balance in such a way that an income statement and a statement of financial position can be derived from within the adjusted trial balance. When this is done, we have what is called the extended trial balance. 

A full extended trial balance will usually have columns for income statement as well as statement of financial position. With these, both the income statement and statement of financial position will be drafted alongside the adjustment entries. A format of this is given below