Financial Statements Should Be Prepared

question 116

Multiple Choice

Financial statements should be prepared

• A) using the retained earnings account.
• B) using permanent accounts only.
• C) from a post-closing trial balance.
• D) from an adjusted trial balance.

---

Definitions:

Planning Assumption

An assumption about the future on which a business plan is based. The assumption must be reflected in the firm’s financial projections by calculating the specific financial statement figures it implies.

Financial Statement

A formal record of the financial activities and position of a business, person, or other entity, typically detailed in an income statement, a balance sheet, and a statement of cash flows.

Strategic Plans

Long-term, forward-looking approaches and plans created by organizations to achieve major goals and objectives.

Potential Investors

Individuals or entities that are capable of allocating capital in the form of investments, considering opportunities with potential for financial return.