Which of the Following Is Not an Example of an Adjusting

question 42

Multiple Choice

Which of the following is not an example of an adjusting entry?

• A)Recording unpaid interest at year end relating to an outstanding loan balance at year end
• B)Recording amortization on office equipment purchased during the year
• C)Recording the gain on the sale of equipment made during the year.
• D)Reducing the prepaid rent account for the portion of rent actually used.

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Definitions:

Demand Determined

A characteristic of markets where the quantity of goods or services sold is primarily influenced by consumer demand.

Perfectly Inelastic

A market situation where the quantity demanded or supplied is completely unresponsive to price changes.

Demand Determined

A market characteristic where the quantity of products or services provided is primarily set by the level of demand.

Fixed Supply

A situation where the quantity of a specific good available in the market cannot be altered in the short term.