Question

What is the correct sequence of the following action required for the preparation of Final Accounts?
(1) Preparation of Trial Balance
(2) Balancing of Accounts
(3) Preparation of Annual Financial Statements
(4) Marking Adjusting Entries
Select the correct answer from the codes given below:-

• A. 4, 2, 1, 3
• B. 2, 4, 3, 1
• C. 2, 1, 4, 3
• D. 4, 2, 3, 1

Answer 1

Answer: (C)

2, 1, 4, 3

The correct sequence for preparation of final accounts are:-

1) Balancing of all the ledger accounts so that the balance can be transferred to the trial balance.

2) Transfer of ledger balances to the trial balance.

3) Passing any adjustment entries. They are usually the entries passed at the end of the year.

4) After adjusting entries passed final accounts are prepared.