Of the Following Adjusting Entries, Which One Would Cause an Increase

question 35

Multiple Choice

Of the following adjusting entries, which one would cause an increase in assets at the end of the period?

• A) The entry to record the earned portion of rent received in advance.
• B) The entry to accrue unrecorded interest expense.
• C) The entry to accrue unrecorded interest revenue.
• D) The entry to record expiration of prepaid insurance.

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Definitions:

Beginning Inventory

The amount of goods presented for buying at the initial stage of an accounting term.

Goods Available for Sale

The total quantity of goods that a company has in stock and is available to be sold, including both finished goods and those still in production.

Ending Inventory

Available goods for sale's value at an accounting period's termination.

Periodic Inventory System

An inventory accounting method where updates to inventory levels are made periodically, often at the end of a financial period.