Adjusting Entries Are Made at the End of the Period

question 131

Multiple Choice

Adjusting entries are made at the end of the period because of the need to

• A)adjust the balance in the cash account for the effects of all daily transactions with customers and creditors.
• B)assure that debits are equal to credits prior to preparing the trial balance.
• C)assure that all revenues and expenses are recognized in the period in which they are earned or incurred.
• D)prepare revenue and expense accounts for recording transactions in the next accounting period by bringing the balances to zero.

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Definitions:

Overhead Controllable Variance

The difference between the actual overhead incurred and the overhead that should have been incurred, given the level of activity, which is under the control of management.

Overhead Volume Variance

The difference between the expected (budgeted) and the actual overhead costs incurred, due to variations in the level of produced or sold volume.

Standard Cost

A predetermined cost of manufacturing a product or providing a service, used as a benchmark to measure performance.

Nutrition Drink

A beverage designed to provide dietary supplements or essential nutrients that might be missing or insufficient in a person's diet.