A Trial Balance Prepared Before Any Adjustments Have Been Recorded

question 54

Multiple Choice

A trial balance prepared before any adjustments have been recorded is

• A)An adjusted trial balance.
• B)An unadjusted trial balance.
• C)Used to prepare the financial statements.
• D)Will not have the debits equal to the credits.
• E)Correct with respect to proper balance sheet and income statement amounts.

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Definitions:

Allowance Method

An accounting technique used to account for potential uncollectible receivables by estimating and recording bad debts expense ahead of specific account identifications.

Uncollectible Receivables

Receivables from sales or loans that are not expected to be collected, often written off as bad debts.

Estimate

An approximation or educated guess used to project future financial outcomes or the potential costs of projects.

Direct Write-off

The direct write-off method is an accounting practice where uncollectible debts are written off as an expense only when they are deemed unrecoverable.