Which of These Would Be Considered a Reclassifying Entry

question 9

Multiple Choice

Which of these would be considered a reclassifying entry?

• A) a significant amount of inventory was found which had not been included in the accounts and subsequently was by the auditors.
• B) payroll owing for the last five days of the financial year was recorded by management.
• C) the accounts receivable balance is debited by the auditors to separately show customer accounts with credit balances relating to customer advances.
• D) depreciation on the office equipment was recorded by the accountant

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Definitions:

Regressive

A term used to describe a tax system in which the tax rate decreases as the taxpayer's income increases, placing a larger burden on lower-income earners.

Ability-to-Pay Principle

A taxation principle that argues taxes should be levied according to an individual's or entity's capability to bear the tax burden.

Income Taxes

Taxes levied by governments on individuals or corporations' income, where the tax rate may increase as the taxable amount increases.

Excise Taxes

Taxes imposed on the sale of specific goods and services, such as tobacco, alcohol, and gasoline, usually aimed at discouraging their consumption or generating revenue.