The Company Uses Up $5,000 of an Existing Asset

question 1

Multiple Choice

The company uses up $5,000 of an existing asset.The company adjusts its accounts accordingly.Which of the following is a true statement?

• A)This is an accrual adjustment.
• B)This is a closing adjustment.
• C)This is a deferral adjustment.
• D)This is an unethical adjustment.

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Definitions:

Reimburse

To pay back or compensate for money that has been spent or lost.

Days' Sales Uncollected

A fiscal indicator quantifying the mean span of days required for a business to receive payment post a sale transaction.

Net Credit Sales

Net Credit Sales refer to the total value of sales made on credit during a specific period, minus returns and allowances.

Accounts Receivable

The money owed to a company by its customers for goods or services that have been delivered but not yet paid for.