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The________ trial balance tests the double entry principle after adjustments were made. This trial balance is normally prepared at year-end.

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Solution

The correct term to fill in the blank is "adjusted" trial balance.

The adjusted trial balance is a critical financial statement prepared at the end of an accounting period, after all adjustments have been made to the accounts. It serves to ensure that the total debits equal the total credits following any adjustments for accrued expenses, accrued revenues, deferred expenses, and deferred revenues. The adjusted trial balance is essential because it provides a summary of all account balances, making it easier to prepare the income statement and balance sheet. This trial balance helps confirm the accuracy of the bookkeeping entries and verifies that the financial records comply with the double-entry bookkeeping system, wherein every entry to an account requires a corresponding and opposite entry to a different account.

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