Which of the Following Statements Regarding Types of Adjusting Entries

question 2

Multiple Choice

Which of the following statements regarding types of adjusting entries is true?

• A)An accrual adjustment that increases an asset will include an increase in an expense.
• B)A deferral adjustment that decreases an asset will include an increase in an expense.
• C)An accrual adjustment that increases an expense will include an increase in assets.
• D)A deferral adjustment that increases a contra account will include an increase in an asset.

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Definitions:

Production Possibility Frontier

A curve depicting the maximum attainable combinations of two or more goods and services that can be produced with available resources and technology.

Opportunity Costs

The cost of choosing one option over another, represented by the value of the opportunities or benefits the second-best choice would have provided.

Aggregate Demand

The total demand for goods and services within a particular market or economy at a given overall price level and in a given time period.

Full Employment

A situation where all available labor resources are being used in the most economically efficient way.