The Idea That Certain Figures on an Operating Statement Help

question 31

Multiple Choice

The idea that certain figures on an operating statement help to explain changes in figures on comparative balance sheets is referred to as

• A) Liquidity
• B) Double entry
• C) Articulation
• D) Classification

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Definitions:

Adjusting Entries

The journal entries that bring the accounts up to date at the end of the accounting period.

Accounting Period

A specific time period in which all financial transactions are recorded and financial statements are prepared.

Allowance

An accounting adjustment for accounts receivable, representing a reduction in the amount expected to be received due to potential uncollectible debts.

Doubtful Accounts

Accounts receivable that a company does not expect to collect fully.