Which step is performed after adjusting entries are journalized and posted to the ledger?

• A. An adjusted trial balance is prepared.
• B. Financial statements are prepared.
• C. A post-closing trial balance is prepared.
• D. Transactions are posted to the ledger.

Answer: (A)

After adjustments have been recorded and posted, the next step is to prepare an adjusted trial balance. This step shows every account with its balance after the adjustments, verifies that total debits equal total credits, and provides the updated data used to generate the financial statements. It captures the revised figures for revenues and expenses, assets and liabilities, reflecting what actually occurred in the period. Financial statements are prepared from these adjusted balances, while a post-closing trial balance is prepared after closing entries, and posting transactions to the ledger occurred earlier in the cycle.