An adjusted trial balance is a worksheet, normally used in bookkeeping that contains accounting ledger balances after errors have been corrected. Usually, it is used in the preparation of changes in the income statement and balance sheet. It can also be used to determine whether the systems of bookkeeping are computed correctly.
To come up with an adjusted trial balance, it is important to come up with a trial balance. Adjusting entries arise from the imbalances of both the debit and credit sides of the trial balance. However, it is important to note that even when both the debit and the credit sides of the trial balance are equal it does not mean that the trial balance is correct (Belverd, Marian & Susan, 2010).
To correct the imbalances on the trial balance, adjusting entries are prepared in form of ledgers to correct the errors. The balances from the ledgers are then posted on an adjusted trial balance containing both debit and credit columns.
Reference
Belverd, E., Marian, P., & Susan, V. (2010). Financial and Managerial Accounting. Belmont, California: Cengage Learning.