Which of the Following Statements Is False Regarding Adjusting Entries

question 90

Multiple Choice

Which of the following statements is false regarding adjusting entries?

• A) Cash is neither debited nor credited as a result of adjusting entries.
• B) Each adjusting entry affects one statement of financial position account and one income statement account.
• C) Each adjusting entry affects one revenue account and one expense account.
• D) Adjusting entries involve accruals or deferrals.

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Definitions:

Forged Indorsement

A fraudulent signature, often on the back of a negotiable instrument like a check, intended to transfer its ownership.

Conversion

An unauthorized act that deprives an owner of their property without their approval, often involving theft or misuse of the property.

Required Indorsements

Signatures or stamps mandatory on certain documents to validate them or to transfer rights represented by such documents.

Holder in Due Course

A person who has acquired a negotiable instrument in good faith and for consideration, and thus has certain rights above the original parties to the instrument.