Which of the following statements in 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.

Question

Quizplus · Accepted Answer

Financial statements should not be prepared directly from the unadjusted trial balance, because this does not take into account any necessary adjusting entries that may be required to accurately reflect the financial position of the company. Adjusting entries must be made and recorded before financial statements can be prepared, and these adjustments are reflected in the adjusted trial balance. Therefore, financial statements should be prepared from the adjusted trial balance.

Which of the Following Statements in Incorrect