A Trial Balance Is Prepared to

question 161

Multiple Choice

A trial balance is prepared to

• A) prove that there were no errors made in recording transactions into the journal
• B) prove that no errors were made in posting to the ledger
• C) prove that each account balance is correct
• D) summarize the account balances to help prepare financial statements

Recognize the components and content of formal and informal reports.

Identify the appropriate use of direct and indirect order in report writing.

Acknowledge the role of executive summaries and their content.

Distinguish between the formats and styles of letter reports and formal reports.

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Definitions:

Adjusting Entries

Journal entries made at the end of an accounting period to update certain accounts and ensure they reflect the true financial position of a company.

Adjusting Entries

These are journal entries made in the accounts to adjust revenues and expenses to the period in which they actually occurred, ensuring that financial statements reflect accurate figures.

Estimated Items

Financial statement items that require a degree of estimation by management to determine the appropriate values to record.

Prepaid Assets

Expenses paid in advance which are recorded as assets because they provide future economic benefits to the company.