A Reversing Entry

question 46

Multiple Choice

A reversing entry

• A) reverses entries that were made in error.
• B) is the exact opposite of an adjusting entry made in a previous period.
• C) is made when a business disposes of an asset it previously purchased.
• D) is made when a company sustains a loss in one period and reverses the effect with a profit in the next period.

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Definitions:

Standard Deviation

A statistical measure that represents the dispersion or variation of a set of values, commonly used to assess risk in finance.

Average Return

Average return refers to the mean amount of profit or loss generated by an investment over a specified period.

Standard Deviation

A measure of the dispersion or variance in a distribution of data points, indicating how spread out the data is from its mean.

Average Return

The arithmetic mean of a series of returns generated over a period of time.