Which of the Following Statements Is True About a Journal

question 52

Multiple Choice

Which of the following statements is true about a journal entry?

• A) The Post.Ref.column is filled in prior to posting.
• B) All credits are listed before any debits.
• C) The name of the month should be repeated for each entry.
• D) An explanation must follow each journal entry.

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Definitions:

Net Present Value

The difference between the present value of cash inflows and outflows over a period, used in capital budgeting to assess the profitability of an investment.

Straight-Line Depreciation

Straight-line depreciation is a method that allocates an equal portion of an asset's cost to each year of its useful life for accounting and tax purposes.

Net Present Value

A calculation used to assess the profitability of an investment, considering the time value of money by discounting future cash flows.

Capital Budgeting

The method of arranging and controlling an organization's long-term financial commitments to key projects or assets.