The Accounting Cycle Requires Three Trial Balances Be Done

question 22

Multiple Choice

The accounting cycle requires three trial balances be done. In what order should they be prepared?

• A) Post-closing, unadjusted, adjusted
• B) Unadjusted, post-closing, adjusted
• C) Unadjusted, adjusted, post-closing
• D) Post-closing, adjusted, unadjusted

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Definitions:

Liability Accounts

Financial accounting records that represent the obligations or debts a company owes to others.

Expense Accounts

Accounts used to track and categorize money spent by a company in conducting its operations.

Unearned Items

Items for which payment has been received, but the service or product has not yet been delivered or completed.

Liability Accounts

Accounts on a company's balance sheet that track what it owes to others, including loans, accounts payable, and mortgages.