Question

The financial accounting cycle ends with?

1) The production of financial statements
2) The production of a post closing trial balance
3) The production of an adjusted trial balance
4) Development of cash forecasts

Answer 1

The financial accounting cycle concludes with the creation of a post-closing trial balance, which resets temporary account balances for the upcoming period.

Step-by-step explanation:

The financial accounting cycle ends with the production of a post-closing trial balance. The process begins with transactions and leads to the creation of financial statements. However, the accounting cycle is not considered complete until a post-closing trial balance is prepared. This step ensures that all temporary accounts, such as revenues, expenses, and dividends, are closed and their balances reset to zero, so that the new accounting period can begin with a clean slate.