Once the Adjusting Entries Have Been Prepared (Journalized and Posted)

question 22

Multiple Choice

Once the adjusting entries have been prepared (journalized and posted) , which of the following steps of the accounting cycle are carried out in proper sequence?

• A) Prepare an adjusted trial balance, prepare financial statements, close temporary accounts, prepare a post-closing trial balance.
• B) Prepare an unadjusted trial balance, prepare financial statements, close temporary accounts, prepare a post-closing trial balance.
• C) Prepare closing entries, prepare financial statements, prepare an adjusted trial balance, prepare a post-closing trial balance.
• D) Prepare financial statements, prepare an adjusted trial balance, prepare closing entries, prepare a post-closing trial balance.

---

Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or used up within one year or within the normal operating cycle of the business, whichever is longer.

Operating Income

Profit generated from a company's core business operations, excluding expenses and incomes from other sources.

Operating Activities

Transactions and other events that enter into the determination of net income, apart from investing and financing activities.

Cash Flow Statement

The Cash Flow Statement is a financial document that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investments, and all cash outflows that pay for business activities and investments during a given period.