Reversing Entries Are Used to Reverse Two Type of Adjusting

question 81

Multiple Choice

Reversing entries are used to reverse two type of adjusting entries:

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

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Definitions:

Redistributing Income

The transfer of income from certain individuals or groups to others through mechanisms like taxation, welfare programs, and social policies to achieve greater social equity.

Income Distribution

The way in which total income is shared among the members of a society.

Allocation of Resources

The process of distributing available resources for various uses in an economy.

Leaky Bucket

A metaphor often used in economics to describe the inefficiencies or waste that can occur in the distribution or allocation of resources.