The adjusted trial balance serves as the basis for preparing:

Question

Quizplus · Accepted Answer

The adjusted trial balance includes all the necessary adjustments made to the trial balance to ensure accuracy, such as adjusting entries for accruals and deferrals. This adjusted trial balance is then used as the basis for preparing both the balance sheet and the income statement. Therefore, choice C is correct. The statement of retained earnings is prepared using the net income figure from the income statement, but it is not directly based on the adjusted trial balance. As for choice A and D, the adjusted trial balance is not sufficient to prepare either the balance sheet or the income statement separately.

The Adjusted Trial Balance Serves as the Basis for Preparing