Adjusting Entries Are

question 30

Multiple Choice

Adjusting entries are:

• A) not needed under the accrual basis of accounting.
• B) prepared at the option of the accountant.
• C) prepared at the beginning of the accounting period to update all accounts.
• D) prepared at the end of the accounting period to update certain accounts.

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Definitions:

Reversing Entries

Journal entries made at the beginning of an accounting period to reverse or cancel out adjusting entries made at the end of the previous accounting period, simplifying record-keeping.

Profit Margin

A financial ratio calculated as net income divided by revenue, expressing the percentage of each dollar of revenue that remains as profit.

Net Income

The profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Net Sales

The revenue from goods or services sold by a company after deducting returns, allowances for damaged or missing goods, and discounts.