Which of the following statements is false?
A) Companies can prepare the income statement and the statement of financial position directly from the adjusted trial balance.
B) Companies can prepare the statement of cash flows directly from the adjusted trial balance.
C) The adjusted trial balance proves the equality of total debits and total credits after all adjustments.
D) Each adjusting entry affects one statement of financial position account and one income statement account.

Question

Quizplus · Accepted Answer

The statement of cash flows cannot be prepared directly from the adjusted trial balance. It requires additional information such as changes in non-current assets and liabilities, and cash receipts and payments during the period. The other statements (income statement and statement of financial position) can be prepared directly from the adjusted trial balance. The adjusted trial balance proves the equality of total debits and total credits after all adjustments have been made, and each adjusting entry affects at least one income statement account and one statement of financial position account.

Which of the Following Statements Is False