Which of the Following Statements Regarding the Role of Cash

question 51

Multiple Choice

Which of the following statements regarding the role of cash in adjusting entries is true?

• A) Adjustments are only made if cash has been received or paid during the period.
• B) Adjusting journal entries do not affect the cash account.
• C) Adjusting entries for expenses include a debit to cash.
• D) Adjusting entries for revenues include a credit to cash.

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Definitions:

Future Value

The value of a current asset or amount of money at a specified time in the future, accounting for interest or capital gains.

FV

A financial term representing the future value of an investment, accounting for factors like interest rates and time.

Quarterly Compounding

The process of calculating interest on both the initial principal and the accumulated interest over four periods within a year.

Semi-Annually

Occurring twice a year; typically referring to the frequency at which interest is paid or calculated.