Which Statement Is Correct Concerning the Adjusted Trial Balance

question 31

Multiple Choice

Which statement is correct concerning the adjusted trial balance?

• A)An adjusted trial balance eliminates the need for the preparation of financial statements.
• B)The purpose of an adjusted trial balance is to prove the equality of the total debit balances and the total credit balances in the ledger.
• C)An adjusted trial balance will contain only permanent-balance sheet-accounts.
• D)The adjusted trial balance is prepared after the adjusting entries have been journalized but before they have been posted.

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Definitions:

Additional Revenue

Income generated from activities not related to the primary operation of the business.

Straight-Line Depreciation

A scheme for disbursing the expenditure of a physical property over its operational lifespan in equivalent annual quotas.

Capital Budgeting

The process of evaluating, comparing, and selecting the best projects to invest in to maximize a firm’s value, considering long-term investments.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term liquidity and operational efficiency of the business.