3.5: Preparing Financial Statements
- Page ID
- 20083
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learning objective
LO4 – Use an adjusted trial balance to prepare financial statements.
In the last section, we saw that the adjusted trial balance is prepared after journalizing and posting the adjusting entries. This section shows how financial statements are prepared using the adjusted trial balance.
Figure \(\PageIndex{1}\): BDCC's January 31, 2015 Adjusted Trial Balance and Links Among Financial Statements
The income statement is prepared first, followed by the statement of changes in equity as shown below.
Figure \(\PageIndex{2}\)
The balance sheet can be prepared once the statement of changes in equity is complete.
Figure \(\PageIndex{3}\)
The balance sheet can be prepared once the statement of changes in equity is complete.