A Correcting Entry

question 75

Multiple Choice

A correcting entry

• A)must involve one balance sheet account and one income statement account.
• B)is another name for a closing entry.
• C)may involve any combination of accounts.
• D)is a required step in the accounting cycle.

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Definitions:

Economist

A professional practitioner or scholar who studies the production, distribution, and consumption of goods and services.

Quick Ratio

The quick ratio, also known as the acid-test ratio, is a measure of a company's ability to meet its short-term obligations with its most liquid assets.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets.

Inventory

The goods and materials a business holds for the ultimate goal of resale or utilization in production.