A Reversing Entry

question 131

Multiple Choice

A reversing entry:

• A)is required by Generally Accepted Accounting Principles (GAAP).
• B)is dated the last day of an accounting period.
• C)is the same as the prior adjusting entry passed in the books.
• D)switches the debit and the credit of a previous entry.

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Definitions:

Short-Run Production

The period in which at least one input or factor of production is fixed, allowing firms to adjust only certain inputs to change output levels.

Average Total Cost

The total cost of production (fixed and variable costs) divided by the total quantity of output produced.

Marginal Cost

The additional cost incurred in the production of one extra unit of a good or service.

Average Fixed Cost

The fixed costs of production divided by the quantity of output produced; these costs decline as production increases.