An Adjusted Trial Balance

question 121

Multiple Choice

An adjusted trial balance

• A)is prepared after the financial statements are completed.
• B)proves the equality of the total debit balances and total credit balances of ledger accounts after all adjustments have been made.
• C)is a required financial statement under international financial reporting standards.
• D)cannot be used to prepare financial statements.

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Definitions:

Fixed Cost

Fixed costs are those that stay the same, unaffected by the volume of production or sales, and cover charges like rent, salaries, and insurance fees.

Total Variable Cost

The sum of all costs that vary with the level of output, such as raw materials and labor expenses, for a given period.

Average Variable Cost (AVC)

The total variable costs of production divided by the quantity of output produced, representing the variable cost per unit of output.

Average Total Cost

The total cost of production divided by the quantity of output produced, representing the average cost per unit of good or service.