Which of the Following Statements About Adjustments Is Correct

question 26

Multiple Choice

Which of the following statements about adjustments is correct?

• A)Accrued wages are wages owed,but not yet paid,to employees;the accrued wages will need to be recorded with an adjusting entry that increases expenses.
• B)When making an adjustment to recognize supplies used in a period,total assets will not change.
• C)Deferral adjustments are used to update amounts that have been previously deferred on the income statement.
• D)Depreciation is an example of an accrual adjustment.

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Definitions:

Fair Values

An estimate of the market value of an asset or liability, based on assumptions of what market participants would use in an orderly transaction at the measurement date.

Common Stock

A type of equity security that represents ownership in a corporation, providing rights to vote on corporate matters and receive dividends.

Acquisition

Acquisition involves purchasing all or a substantial portion of the assets or ownership stakes of a company, effectively bringing it under the control of the acquiring entity.

Consolidated Common Stock

Represents the aggregation of common stock of a parent company and its subsidiaries, shown in the consolidated financial statements.