Better Advice,a Service Company,uses Reversing Entries $$\begin{array} { | l | r | r | } \hline \text { Utility expense } & 650 & \\\hline \text { Accounts payable } & & 650 \\\hline\end{array}$$

question 110

Multiple Choice

Better Advice,a service company,uses reversing entries.On March 31,they posted the following adjusting entry to accrue utility expenses: $$\begin{array} { | l | r | r | } \hline \text { Utility expense } & 650 & \\\hline \text { Accounts payable } & & 650 \\\hline\end{array}$$ Which of the following represents the proper reversing entry to be posted on April 1?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Accounts payable } & 650 & \\
• \hline \text { Utility expense } & & 650 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | r | }
• \hline \text { Utility expense } & 650 & \\
• \hline \text { Accounts payable } & & 650 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 650 & \\
• \hline \text { Utility expense } & & 650 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Utility expense } & 650 & \\
• \hline \text { Accounts receivable } & & 650 \\
• \hline
• \end{array}\]

---

Definitions:

Ability-To-Pay

A principle in taxation that suggests taxes should be levied according to the taxpayer's ability to bear the tax burden.

Maximal Deadweight Loss

The largest possible efficiency loss in a market, occurring when the allocation of resources is not optimal, often due to factors like taxes, subsidies, or monopolies.

Ability To Pay

A principle suggesting that taxes should be levied on individuals or entities based on their capacity to pay, usually measured by income or wealth.

Benefits Principle

The benefits principle is a taxation theory suggesting that taxes should be levied according to the level of benefits received by the taxpayer from government services.