Which of the Statements Below Is Not True

question 25

Multiple Choice

Which of the statements below is not true?

• A) An adjusted trial balance should show ledger account balances.
• B) An adjusted trial balance can be used to prepare financial statements.
• C) An adjusted trial balance proves the mathematical equality of debits and credits in the ledger.
• D) An adjusted trial balance is prepared before all transactions have been journalized.

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Definitions:

Cost Flow Assumption

An accounting method used to value inventory and determine the cost of goods sold, such as FIFO (First In, First Out) or LIFO (Last In, First Out).

LIFO

"Last In, First Out" method of inventory valuation where the most recently produced items are recorded as sold first.

FIFO

First In, First Out, an inventory valuation method where goods purchased or produced first are sold or consumed first.

Average Cost Method

An inventory costing method that determines the cost of goods sold and ending inventory based on the weighted average cost of all items available for sale.