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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?

$490,000 (D) Signup and view all the answers

What type of account is Note Payable?

Liability (C) Signup and view all the answers

What is the primary purpose of a General Journal?

To record transactions (C) Signup and view all the answers

What is the primary purpose of posting transactions to ledgers?

To transfer amounts from the journal to the general ledger accounts (D) Signup and view all the answers

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

Detail information about individual accounts (A) Signup and view all the answers

What is the purpose of a subsidiary ledger?

To contain the detail accounts associated with a general ledger account (D) Signup and view all the answers

What is the primary purpose of an accounting information system?

To collect, record, store, and process data to produce information for decision-making (B) Signup and view all the answers

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

Subsidiary Ledger (B) Signup and view all the answers

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

Posting (A) Signup and view all the answers

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

Capacity to produce at least two main financial statements (B) Signup and view all the answers

What is the purpose of a general journal?

To record transactions in a chronological order (A) Signup and view all the answers

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

Recording transaction data in journals (D) Signup and view all the answers

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

To present a chronological record of transactions (D) Signup and view all the answers

What is the purpose of ledgers in an accounting system?

To sort data by account type (C) Signup and view all the answers

What is the benefit of an integrated accounting system?

It allows for efficient and effective data collection, storage, and processing (D) Signup and view all the answers

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