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#cfa-level-1 #reading-23-financial-reporting-mechanics
Question
What is the first step in producing financial statements at the end of a period?
Answer
Creating Trial balances

Tags
#cfa-level-1 #reading-23-financial-reporting-mechanics
Question
What is the first step in producing financial statements at the end of a period?
Answer
?

Tags
#cfa-level-1 #reading-23-financial-reporting-mechanics
Question
What is the first step in producing financial statements at the end of a period?
Answer
Creating Trial balances
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A trial balance is a document that lists account balances at a particular point in time. Trial balances are typically prepared at the end of an accounting period as a first step in producing financial statements. A key difference between a trial balance and a ledger is that the trial balance shows only total ending balanc

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ved and the corresponding liability to deliver newsletters) and, subsequently, 12 future adjusting entries, the first one of which was illustrated as Transaction 12. Each adjusting entry reduces the liability and records revenue. <span>In practice, a large amount of unearned revenue may cause some concern about a company’s ability to deliver on this future commitment. Conversely, a positive aspect is that increases in unearned revenue are an indicator of future revenues. For example, a large liability on the balance sheet of an airline relates to cash received for future airline travel. Revenue will be recognized as the travel occurs, so an increase in this liability is an indicator of future increases in revenue. <span><body><html>

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