Adjusting Entries Are Needed to Ensure That Revenue Is Recorded

question 81

Multiple Choice

Adjusting entries are needed to ensure that revenue is recorded when ______ and expenses are recorded when ______.

• A) earned, incurred
• B) collected, paid
• C) earned, paid
• D) collected, incurred

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Definitions:

Capacity Utilization Rate

A metric used to measure the rate at which potential output levels are being met or used.

Interest Rate

The percentage at which interest is charged or paid on amounts of money, reflecting the price of credit or returns on investment.

Personal Property

Movable property that is not attached to real estate, including vehicles, furniture, and personal belongings.

U.S. Government Bonds

Debt securities issued by the United States Department of the Treasury to fund federal government operations and obligations, considered low-risk investments.