Which of the Following Best Describes Adjustments

question 46

Multiple Choice

Which of the following best describes adjustments:

• A)adjustments ensure proper matching.
• B)they are used to record external events.
• C)(a) and (d).
• D)they are usually prepared at the end of the accounting period.

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Definitions:

Market Rate

The prevailing interest rate available in the marketplace for loans, savings, and investments, also reflecting the cost of borrowing money.

Weighted Average Cost

The calculation that takes into account the varying costs of goods and the quantity of each, to determine an average cost.

Preferred Stock

A class of stock that typically has a priority claim on dividends and assets in the event of liquidation over common stock.

Yield

The income return on an investment, such as the interest or dividends received, expressed as an annual percentage of the investment’s cost.