Which of the Following Statements Regarding Adjusting Entries Is Not

question 77

Multiple Choice

Which of the following statements regarding adjusting entries is not true?

• A) Adjustments are needed to ensure that the accounting system includes all of the revenues and expenses of the period.
• B) Adjustments help to ensure the related accounts on the balance sheet and income statement are up to date and complete.
• C) Adjusting entries often affect the cash account
• D) Adjusting entries always include one balance sheet and one income statement account

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Definitions:

Semi-strong-form Efficient

Semi-strong-form efficiency is a class of market efficiency that posits that all public information is already reflected in stock prices, making it impossible to consistently achieve higher returns by trading on that information.

Historical Prices

The past trading prices of a security or commodity, often analyzed to identify trends and patterns for future trading decisions.

Variance

A statistical measure of the dispersion of data points in a data set around the mean, indicating the volatility and risk associated with a particular asset or investment.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how much the values in a data set differ from the mean of the data set.