The accounting cycle requires three trial balances be done. In what order should they be prepared?
A) post-closing, unadjusted, adjusted
B) unadjusted, post-closing, adjusted
C) unadjusted, adjusted, post-closing
D) post-closing, adjusted, unadjusted

Question

Quizplus · Accepted Answer

The unadjusted trial balance should be prepared first to ensure all transactions have been recorded in the ledger accounts. Next, the adjusted trial balance should be prepared to reflect any adjusting entries made at the end of the accounting period. Finally, the post-closing trial balance should be prepared to ensure that all temporary accounts have been properly closed and the balance of the retained earnings account equals the net income for the period.

The Accounting Cycle Requires Three Trial Balances Be Done