Which section of the adjusted trial balance is used to help prepare the income statement?

• A. The revenue and expense accounts section
• B. The liability accounts section
• C. The asset accounts section
• D. The equity accounts section

Answer: (A)

Verified step by step guidance

1. Understand the purpose of the income statement: It is a financial report that summarizes revenues and expenses to determine the net income or net loss for a specific period.
2. Identify the sections of the adjusted trial balance: The adjusted trial balance includes various accounts such as assets, liabilities, equity, revenues, and expenses.
3. Focus on the accounts relevant to the income statement: The income statement is prepared using the revenue and expense accounts because these accounts directly impact the calculation of net income or net loss.
4. Exclude other sections: Asset, liability, and equity accounts are not used in the preparation of the income statement as they are part of the balance sheet or statement of equity.
5. Conclude that the revenue and expense accounts section of the adjusted trial balance is used to prepare the income statement.