Which of the Following Adjustments May Be Reversed

question 27

Multiple Choice

Which of the following adjustments may be reversed?

• A) The adjustment to Record Depreciation Expense
• B) The adjustment to Allocate Prepaid Insurance to the current period
• C) The adjustment to Accrue Salaries Payable
• D) The adjustment for Petty Cash replenishment

---

Definitions:

Cheques Outstanding

Cheques that have been written and recorded in the payer's accounting system but have not yet been cashed or cleared by the receiving bank.

Prepaid Expenses

Payments made for goods or services to be received in the future, treated as assets on a balance sheet until used.

Operating Expenses

All expenses incurred from a company's operational activities, excluding cost of goods sold, interest, and taxes.

Operating Activities

Cash flows directly related to earning income, including day-to-day transactions like selling products and paying wages.