Question

Which line item on the adjusted trial balance reports its beginning balance but on the balance sheet reports its ending balance?

A) Prepaid Expenses
B) Accumulated Depreciation
C) Accounts Payable
D) Common Stock

Answer 1

The line item that reports its beginning balance on the adjusted trial balance and its ending balance on the balance sheet is Common Stock. It represents initial equity investment and includes any new issuances by the end of the accounting period.

Step-by-step explanation:

The line item on the adjusted trial balance that reports its beginning balance but on the balance sheet reports its ending balance is Common Stock.

On the adjusted trial balance, the Common Stock account reflects the beginning balance as it represents the initial equity investment in the company. This account does not typically change throughout the accounting period unless there are additional issuances of stock. On the balance sheet, however, the Common Stock item represents the ending balance which includes any changes made during the period like new stock issuances.

Prepaid Expenses and Accumulated Depreciation are balance sheet accounts that represent current asset adjustments and depreciation of fixed assets respectively, while Accounts Payable is a liability that changes with the company's operations and transactions through the period.