Regarding the Preparation of Financial Statements, Which of the Following

question 2

Multiple Choice

Regarding the preparation of financial statements, which of the following is TRUE?

• A) The left column of the Income statement is used only to sub-total amounts.
• B) Financial statements have debit and credit columns.
• C) The Balance Sheet is prepared first.
• D) Each amount on the Balance Sheet can be found on the Trial Balance. (careful!)

---

Definitions:

Premiums

Payments made by individuals or businesses to insurance companies in exchange for coverage against specified risks.

Deductible

An amount of any loss that is to be paid by the insured.

Inflationary Times

Periods characterized by a general increase in prices and fall in the purchasing value of money.

Insurance Policies

Contracts between an insurer and a policyholder, outlining the terms under which the insurer agrees to pay a benefit upon the occurrence of a specified risk or event.