Once The Adjusted Trial Balance Is Balanced, It Can Be Used To Prepare The
The correct choice is (b), as after the preparation of Unadjusted Trial Balance , there is a need to make Adjustments to the accounts due to Accruals And Deferrals at the end of the period. After that Adjusted Trial Balance is prepared completely to reflect updated balances of accounts. Then we are in a position to prepare Financial Statements which include Income Statement, Statement of Stockholders’ Equity and classified balance sheet. Income statement shows Net Income or Net Loss for the period. Net income is the excess of revenues over expenses during the accounting period while net loss is occurred when expenses are greater than revenues for the current period. A classified Balance shows the equality of balances of assets, liabilities and equity on a particular day which may change on the next day. A statement of shareholders’ equity shows the changes or movements of equity over a period of time i.e., from the beginning to the year’s end. This statement shows information abo...