Once a Trial Balance Has Been Prepared, the Next Step

question 7

Multiple Choice

Once a trial balance has been prepared, the next step of the accounting cycle involves

• A) posting the information to the correct ledger accounts.
• B) completing a balance sheet and ratio analysis.
• C) preparing financial statements such as the balance sheet, income statement, and statement of cash flows.
• D) classifying the transactions into logical categories.

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Definitions:

Denominator Level

In cost accounting, refers to the total quantity or capacity used to allocate fixed costs to different cost objects.

Budget Variance

The difference between what was budgeted for a period and what was actually spent or received.

Volume Variance

The difference between the expected (budgeted) volume of production or sales and the actual volume, impacting costs and revenues.

Cooling Coil

A device within an air handling unit or HVAC system used to lower air temperature and remove moisture by passing air over a cold surface.