Adjusting Entries That Are Made to Recognize Revenue That Has

question 53

Multiple Choice

Adjusting entries that are made to recognize revenue that has been received but not yet earned are classified as

• A)estimates.
• B)deferrals.
• C)accruals.
• D)revaluations.

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Definitions:

Prospect Theory

A behavioral economic theory that describes how people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are unknown.

Behavioral Economists

Scholars examining how psychological, cognitive, emotional, cultural, and social influences affect the financial choices of individuals and organizations.

Gains

Increases in economic benefits, such as profits, revenue, or utility.

Losses

Negative financial results from business operations, where expenses exceed revenues.