Which of the Following Is Not an Advantage of Preparing

question 30

Multiple Choice

Which of the following is not an advantage of preparing an adjusted trial balance?

• A) It verifies that the total DRs equal the total CRs in the ledger after the preparation of the adjusting entries.
• B) It is a shortcut which means that the adjusting entries do not have to be entered into the ledger.
• C) It assists in the preparation of the financial statements.
• D) It reduces the possibility of errors being carried forward from the ledger into the financial reports.

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Definitions:

Current Liabilities

Short-term financial obligations due within one year, typically including accounts payable, short-term loans, and accrued expenses.

Prompt Payment Discount

A reduction in the amount owed by a buyer to a seller, provided the payment is made within a specified timeframe.

Borrowing Rate

The interest rate charged by banks or financial institutions on loans to their customers.

Accruals

The accounting practice of recording revenues and expenses when they are incurred, regardless of when cash transactions occur.