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

What is the primary purpose of preparing an adjusted trial balance?

To record all cash receipts and cash payments during the period.

To detect errors in the posting of transactions to the ledger accounts.

To ensure that all adjusting entries have been made and account balances are correct before preparing financial statements.

To close all temporary accounts at the end of the accounting period.

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Verified step by step guidance

Understand the concept of an adjusted trial balance: It is a list of all accounts and their balances after adjusting entries have been made. Adjusting entries are necessary to ensure that revenues and expenses are recorded in the correct accounting period.

Recognize the primary purpose: The adjusted trial balance is prepared to ensure that all adjusting entries have been made and that the account balances are accurate before financial statements are prepared.

Differentiate the adjusted trial balance from other accounting processes: Unlike recording cash receipts/payments or detecting errors in ledger accounts, the adjusted trial balance focuses on verifying the accuracy of account balances after adjustments.

Understand its role in the accounting cycle: The adjusted trial balance is a critical step before preparing financial statements, as it ensures that the financial data is complete and accurate.

Clarify what it does not do: The adjusted trial balance does not close temporary accounts; closing entries are made after financial statements are prepared.