1. Without adjusting entries for accrued expenses:

A: Expenses and liabilities are overstated.

B: Expenses are understated and liabilities are overstated.

C: Expenses are overstated and liabilities are understated.

D: Expenses and liabilities are understated.

2. Which characteristic requires reported information to help investors decide between channeling their money into Company A or Company B?

A: Relevance

B: Comparability

C: Going concern assumption

D: Cost constraint

3. According to the accounting cycle, what step follows immediately after preparing the financial statements?

A. Post-Closing Trial Balance

B: Closing the temporary accounts

C: Posting to the ledger