Which of the Following Statements Regarding Adjusting Entries Is Not

question 133

Multiple Choice

Which of the following statements regarding adjusting entries is not true?

• A)Adjustments are needed to ensure that the accounting system includes all of the revenues and expenses of the period.
• B)Adjustments help to ensure the related accounts on the balance sheet and income statement are up to date and complete.
• C)Adjusting entries often affect the cash account.
• D)Adjusting entries generally include one balance sheet and one income statement account.

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Definitions:

Variable Cost

Costs that vary in direct relation to a business's operations, like expenses for raw materials or manufacturing supplies.

Activity Decreases

Reductions in the volume or intensity of activities, often leading to lower costs or changes in operational strategies.

Cost Estimation

The process of predicting the amount of resources, especially money, time, and labor, necessary to complete a project or produce a product.

Strong Correlation

A statistical relationship between two variables where a change in one is strongly associated with a change in the other.