A Deferral Adjusting Entry That Adjusts Assets (Such as Prepaids

question 41

Multiple Choice

A deferral adjusting entry that adjusts assets (such as prepaids and supplies) :

• A)decreases total assets because cash is paid at the time of the adjustment.
• B)expenses the amount used during the period.
• C)increases total assets because costs are incurred.
• D)increases total assets because cash will be received in the future.

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Definitions:

NPV

Net Present Value, a calculation used to assess the profitability of an investment by summing the present values of all expected future cash flows minus the initial investment cost.

Break-even Points

The level of production or sales at which total revenues equal total expenses, resulting in no net profit or loss.

Cash Break-even

The point at which a business's cash expenses equal its cash revenues, resulting in no net cash flow.

Accounting Break-even

The point at which total revenues equal total expenses, indicating no profit or loss from operations.