The Accounting Cycle Requires Three Trial Balances Be Prepared

question 78

Multiple Choice

The accounting cycle requires three trial balances be prepared. In what order are they prepared?

• A) Post-closing, unadjusted, and adjusted
• B) Unadjusted, post-closing, and adjusted
• C) Unadjusted, adjusted, and post-closing
• D) Post-closing, adjusted, and unadjusted

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Definitions:

Profit-Maximizing

The process by which a firm determines the price and output level that returns the maximum profit.

Marginal Cost

The increase or decrease in the total cost that arises from producing one additional unit of a product.

Annual Fixed Cost

Expenses that do not change in proportion to the activity of a business, within the period of a year.

Socially Efficient

An economic condition where resources are allocated in a way that maximizes total social welfare.