Preparing Financial Statements

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How is Adjusted Trial Balance used for preparing financial statements?

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1. Why doesn't the Balance Sheet utilize all of a company's accounts that are listed on the Adjusted Trial Balance?

2. What is the goal of the Balance Sheet?

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About This Quiz & Worksheet

This quiz and the corresponding worksheet focus on evaluating how to use financial statements to paint the most accurate picture of a company. You'll need to understand what financial statements that can be prepared using the adjusted trial balance as well as identify other kinds of financial statements.

Quiz & Worksheet Goals

This printable worksheet and quiz will help you review various types and elements of financial statements based on their characteristics, including:

  • Able to be prepared using the Adjusted Trial Balance
  • Contains only real accounts
  • Reports expenses
  • Tells how much money a company kept back and reinvested in the company

Skills Practiced

  • Interpreting information - verify you can read information regarding where expenses are reported and interpret it correctly
  • Knowledge application - use your knowledge to answer questions about the various types of financial statements
  • Defining key concepts - ensure that you can accurately define main phrases and terms, such as the statement of retained earnings and adjusted trial balance

Additional Learning

To learn more about how to give management the information they need, review the corresponding lesson titled Preparing Financial Statements. This lesson will help you:

  • Understand the number one goal of accounting
  • Identify the role of the adjusted trial balance in accounting
  • Describe the three financial statements that can be produced
  • Explain what needs to be printed to show a company's permanent accounts
  • Know when an account can be considered balanced
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