Adjusting Entries Must Be Made

question 21

Multiple Choice

Adjusting entries must be made

• A)to correct errors in the accounts.
• B)to reconcile the accounts to the budget.
• C)because auditing standards require them.
• D)because certain types of events will otherwise not be recorded in the accounts.

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Definitions:

Original Cost

The initial amount of money spent to acquire an asset, before depreciation or amortization is taken into account.

Required Rate Of Return

The minimum percentage return an investor expects to receive from an investment due to its risk level.

Tax Rate

The percentage at which an individual or corporation is taxed on their income.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating its short-term financial health and efficiency.