Which of the Following Items Would Require an Adjusting Entry

question 59

Multiple Choice

Which of the following items would require an adjusting entry at the end of each accounting period?

• A) Garnishment for child support payments
• B) Withholdings for a 401(k) plan
• C) Vacation pay earned by employees
• D) Union dues withheld
• E) None of the above

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Definitions:

Fixed Cost

Costs that do not change with the level of production or output, such as rent, salaries, and loan payments.

Variable Cost

Costs that vary based on a company's operations, including outlays for materials needed for manufacturing or other production-related inputs.

Economic Profit

The difference between a firm's total revenue and its total costs, including both explicit and implicit costs, representing the additional value created by the firm.

Accounting Profit

Accounting profit is the financial gain calculated by subtracting total explicit costs from total revenue.