The Unadjusted Trial Balance Is a Key Starting Point for the Adjustment

question 194

Multiple Choice

The unadjusted trial balance is a key starting point for the adjustment process.Which of the following accounts is likely to be affected by an adjusting entry?

• A)Cash
• B)Common Stock
• C)Retained Earnings
• D)Deferred Revenue

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Definitions:

Allowance for Doubtful Accounts

An accounting provision that represents a company's estimate of invoices that will not be paid by customers.

Aging of Accounts Receivable

A method of categorizing accounts receivable based on how long they have been outstanding.

Percentage of Sales Basis

A forecasting method where certain expenses or accounts are based on a predetermined percentage of sales.

Bad Debt Expense

The cost associated with accounts receivable that a company does not expect to collect.