Which of the Following Statements Is Incorrect

question 125

Multiple Choice

Which of the following statements is incorrect?

• A) An unadjusted trial balance is a list of accounts and balances prepared before adjustments are recorded.
• B) An adjusted trial balance is a list of accounts and balances prepared after adjusting entries have been recorded and posted to the ledger.
• C) Each trial balance amount is used in preparing the financial statements.
• D) Financial statements should be prepared directly from information in the unadjusted trial balance.
• E) Financial statements can be prepared directly from information in the adjusted trial balance.

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Definitions:

Operations

The day-to-day activities and processes conducted by a business to generate value and serve its customers effectively.

Asset Turnover Ratio

A measure of how efficiently a company uses its assets to generate sales revenue.

Industry Average

A benchmark or mean performance metric that represents the average outcome or status within a particular industry sector.

Insolvency

The condition of being unable to pay debts as they fall due, often leading to bankruptcy proceedings.