Adjusting Entries Are

question 157

Multiple Choice

Adjusting entries are

• A) not necessary if the accounting system is operating properly.
• B) usually required before financial statements are prepared.
• C) made when the cash basis of accounting is used.
• D) made to income statements accounts only.

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Definitions:

Caveat Emptor

A Latin term meaning "let the buyer beware," advocating that the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made.

Misrepresentation

The provision of false, misleading, or incorrect information about a material fact, intentionally or unintentionally, in a contractual agreement.

Privity Rule

A principle in contract law that states that contracts are private agreements between the parties who have entered into them, affecting no third parties.

Thing or Benefit

Refers to any item of value or advantage that is provided or promised in a transaction or agreement.