**Understanding Adjusted Trial Balances**An adjusted trial balance is a vital component in the accounting cycle. It helps ensure that all financial records are accurate before the preparation of financial statements. The purpose of the adjusted trial balance is to confirm that the debits equal the credits after adjusting entries have been made. Below are several statements concerning adjusted trial balances. Analyze which one is true based on accounting principles:**Question:** Which statement about an adjusted trial balance is true?**Options:**- **A) An adjusted trial balance is completed after completing the income statement.**- **B) The purpose of an adjusted trial balance is to ensure that all adjusting entries have been recorded.**- **C) If the adjusted trial balance does not balance, then an error has been made.**- **D) If an adjusting entry is omitted, the adjusted trial balance will not balance.****Explanation:**1. **Option A:** This statement is incorrect. The adjusted trial balance is typically prepared before the income statement, not after. It ensures that the ledger balances are in order before the preparation of financial statements. 2. **Option B:** This statement is correct. The adjusted trial balance ensures that all adjusting entries, which are adjustments to accounts to align them with the accrual basis of accounting, have been recorded. It serves as a final check for the account balances before the financial statements are prepared.3. **Option C:** This statement is also true. If the adjusted trial balance does not balance, it indicates that there is an error in the recording of transactions or in the preparation of adjusting entries. The total debits must always equal the total credits for the trial balance to balance.4. **Option D:** This statement is incorrect. While an omitted adjusting entry will affect the accuracy of account balances, it's possible that the trial balance might still balance numerically. However, the balances would not accurately reflect the true financial position.In conclusion, the correct and true statement based on the context provided is **B) The purpose of an adjusted trial balance is to ensure that all adjusting entries have been recorded.**

The correct answer is c. if the adjusted trial balance does not balance , then an error has been…

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Business

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statement about an adjuste An adjusted trial balance The purpose of an adjuste

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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**Understanding Adjusted Trial Balances**

An adjusted trial balance is a vital component in the accounting cycle. It helps ensure that all financial records are accurate before the preparation of financial statements. The purpose of the adjusted trial balance is to confirm that the debits equal the credits after adjusting entries have been made. Below are several statements concerning adjusted trial balances. Analyze which one is true based on accounting principles:

**Question:** Which statement about an adjusted trial balance is true?

**Options:**
- **A) An adjusted trial balance is completed after completing the income statement.**
- **B) The purpose of an adjusted trial balance is to ensure that all adjusting entries have been recorded.**
- **C) If the adjusted trial balance does not balance, then an error has been made.**
- **D) If an adjusting entry is omitted, the adjusted trial balance will not balance.**

**Explanation:**
1. **Option A:** This statement is incorrect. The adjusted trial balance is typically prepared before the income statement, not after. It ensures that the ledger balances are in order before the preparation of financial statements.

2. **Option B:** This statement is correct. The adjusted trial balance ensures that all adjusting entries, which are adjustments to accounts to align them with the accrual basis of accounting, have been recorded. It serves as a final check for the account balances before the financial statements are prepared.

3. **Option C:** This statement is also true. If the adjusted trial balance does not balance, it indicates that there is an error in the recording of transactions or in the preparation of adjusting entries. The total debits must always equal the total credits for the trial balance to balance.

4. **Option D:** This statement is incorrect. While an omitted adjusting entry will affect the accuracy of account balances, it's possible that the trial balance might still balance numerically. However, the balances would not accurately reflect the true financial position.

In conclusion, the correct and true statement based on the context provided is **B) The purpose of an adjusted trial balance is to ensure that all adjusting entries have been recorded.**

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