Alternative Adjusting Entries Do Not Apply to

question 167

Multiple Choice

Alternative adjusting entries do not apply to

• A) accrued revenues and accrued expenses.
• B) prepaid expenses.
• C) unearned revenues.
• D) prepaid expenses and unearned revenues.

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Definitions:

Direct Method

A way of reporting cash flows from operating activities by listing major classes of gross cash receipts and payments.

Amortization of Bond Premium

The process of gradually writing off the premium paid over the par value of a bond over its life.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues.

FASB

The Financial Accounting Standards Board, an independent organization responsible for establishing and improving financial accounting and reporting standards in the United States.