Which of the following statements related to the adjusted trial balance is incorrect?

A) It shows the balances of all accounts at the end of the accounting period.
B) It is prepared before adjusting entries have been made.
C) It proves the equality of the total debit balances and the total credit balances in the ledger.
D) Financial statements can be prepared directly from the adjusted trial balance.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments are made for accruals, deferrals, and errors, ensuring the total debits equal the total credits.

Accounting Period

The period of time covered by financial statements, usually consisting of 12 months, but can be of any length according to the business's reporting requirements.

Ledger

A book or collection of financial accounts where transactions are recorded.