A Reversing Entry Should Never Be Made for an Adjusting

question 65

Multiple Choice

A reversing entry should never be made for an adjusting entry that

• A) accrues unrecorded revenue.
• B) adjusts expired costs from an asset account to an expense account.
• C) accrues unrecorded expenses.
• D) adjusts unexpired costs from an expense account to an asset account.

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Definitions:

Long-Term Liabilities

Refers to debts or obligations that are due in over a year's time, including loans, bonds payable, or lease obligations.

Cash Dividends

A distribution of profits by a corporation to its shareholders in the form of cash.

Operating Activities

Transactions and other events related to the day-to-day function of a business, typically involving revenue and expense activities directly affecting cash flow.

Investments In Securities

Financial assets such as stocks, bonds, or mutual funds purchased with the intent of generating income or appreciating in value.