An Adjusted Trial Balance Is Prepared to

question 18

Multiple Choice

An adjusted trial balance is prepared to

• A)test that the ledger is in balance after the accounts have been adjusted.
• B)facilitate preparation of the adjusting entries.
• C)both test that the ledger is in balance after the accounts have been adjusted and facilitate preparation of the financial statements.
• D)facilitate preparation of the financial statements.

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Definitions:

Order Of Decreasing Liquidity

A ranking of assets on a balance sheet based on their ease of conversion to cash without loss of value.

Order Of Importance

A principle of organization where information is prioritized and arranged according to its significance.

Cash Flow To Creditors

The sum of money paid to creditors during a period, which includes both interest payments and repayments of principal.

Interest

The cost incurred for the benefit of borrowing cash, often articulated as an annual percentage rate.