Preparing Financial Statements: Adjusted Trial Balance
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Questions and Answers

What is the total value of assets recorded on the Balance Sheet?

  • $420,000
  • $340,000
  • $490,000
  • $365,000 (correct)

    • What is the net income reported on the Income Statement?

  • $185,000
  • $87,000 (correct)
  • $115,000
  • $202,000

    • What is the purpose of an Adjusted Trial Balance?

  • To prepare the Income Statement
  • To prepare the Balance Sheet
  • To record transactions in the General Journal
  • To ensure the accuracy of financial statements (correct)

    • What is the total value of liabilities and stockholders' equity on the Balance Sheet?

    <p>$490,000</p> Signup and view all the answers

    What type of account is Note Payable?

    <p>Liability</p> Signup and view all the answers

    What is the primary purpose of a General Journal?

    <p>To record transactions</p> Signup and view all the answers

    What is the primary purpose of posting transactions to ledgers?

    <p>To transfer amounts from the journal to the general ledger accounts</p> Signup and view all the answers

    What type of information is not kept in the general ledger?

    <p>Detail information about individual accounts</p> Signup and view all the answers

    What is the purpose of a subsidiary ledger?

    <p>To contain the detail accounts associated with a general ledger account</p> Signup and view all the answers

    What is the primary purpose of an accounting information system?

    <p>To collect, record, store, and process data to produce information for decision-making</p> Signup and view all the answers

    What is the name of the record that contains the detail information about individual customer accounts?

    <p>Subsidiary Ledger</p> Signup and view all the answers

    What is the term for the process of transferring amounts from the journal to the general ledger accounts?

    <p>Posting</p> Signup and view all the answers

    What is the main characteristic of an accounting system that produces financial statements?

    <p>Capacity to produce at least two main financial statements</p> Signup and view all the answers

    What is the purpose of a general journal?

    <p>To record transactions in a chronological order</p> Signup and view all the answers

    What is the step that occurs after capturing transaction data on source documents?

    <p>Recording transaction data in journals</p> Signup and view all the answers

    What is the primary function of journals in an accounting system?

    <p>To present a chronological record of transactions</p> Signup and view all the answers

    What is the purpose of ledgers in an accounting system?

    <p>To sort data by account type</p> Signup and view all the answers

    What is the benefit of an integrated accounting system?

    <p>It allows for efficient and effective data collection, storage, and processing</p> Signup and view all the answers

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