Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Unadjusted vs Adjusted Trial Balance

Financial Accounting

3. Accrual Accounting Concepts

Unadjusted vs Adjusted Trial Balance

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Multiple Choice

Which of the following statements about the unadjusted trial balance is correct?

It is prepared before any adjusting entries are made at the end of the accounting period.

It only lists accounts with debit balances.

It is used to prepare the post-closing trial balance.

It includes all adjustments for accrued revenues and expenses.

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Verified step by step guidance

Understand the purpose of an unadjusted trial balance: It is a list of all accounts and their balances before any adjusting entries are made at the end of the accounting period. This helps ensure that total debits equal total credits.

Clarify that the unadjusted trial balance includes all accounts, not just those with debit balances. Both debit and credit balances are listed to verify the equality of debits and credits.

Recognize that the unadjusted trial balance is prepared before adjustments for accrued revenues and expenses are made. Adjusting entries are recorded later to account for items like depreciation, accrued expenses, and accrued revenues.

Understand that the unadjusted trial balance is not used to prepare the post-closing trial balance. The post-closing trial balance is prepared after closing entries are made to ensure that only permanent accounts remain.

Review the correct statement: The unadjusted trial balance is prepared before any adjusting entries are made at the end of the accounting period. This is its primary purpose in the accounting cycle.