Which of the Following Adjustments May Be Reversed

question 27

Multiple Choice

Which of the following adjustments may be reversed?

• A) The adjustment to Record Depreciation Expense
• B) The adjustment to Allocate Prepaid Insurance to the current period
• C) The adjustment to Accrue Salaries Payable
• D) The adjustment for Petty Cash replenishment

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Definitions:

Investing Cash Flows

Cash inflows and outflows related to transactions involving the purchase and sale of long-term assets and investments.

Financing Activities

Transactions that result in changes to the size and composition of the equity capital or borrowings of the entity, detailed in the cash flow statement.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle, whichever is longer.