A Reversing Entry

question 180

Multiple Choice

A reversing entry

• A)reverses entries that were made in error.
• B)is the exact opposite of an adjusting entry made in a previous period.
• C)is made when a business disposes of an asset it previously purchased.
• D)is made when a company sustains a loss in one period and reverses the effect with a profit in the next period.

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Definitions:

Heuristics

Mental shortcuts or rules of thumb that simplify decision-making processes, though they may sometimes lead to biases or inaccuracies.

Planning Fallacy

The tendency for individuals or organizations to underestimate the time, costs, and risks of future actions and overestimate the benefits.

Behavioral Economics

A field of economic research that examines how psychological, social, cognitive, and emotional factors affect economic decisions of individuals and institutions.

Brain Modularity

The concept that the human brain is composed of specialized modules or regions, each responsible for different functions or processes.