Reversing Entries Occur at the Beginning of the Accounting Period

question 96

Multiple Choice

Reversing entries occur at the beginning of the accounting period and:

• A) help to reduce potential errors.
• B) simplify the bookkeeping associated with accruals from the prior period.
• C) reverse the adjusting entries.
• D) All of the above are correct.

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Definitions:

Comprehensive Income

The change in equity of a business entity during a period from transactions and other events and circumstances from non-owner sources. It includes all non-owner changes in equity, not just those from net income.

Dividends Declared

A portion of a company's earnings that is decided by the board of directors to be distributed to shareholders.

Statement Of Comprehensive Income

A financial statement that displays all changes in equity during a period except those resulting from investments by and distributions to the company’s shareholders.

Other Comprehensive Income

Income that includes all changes in equity from non-owner sources, such as foreign exchange adjustments or unrealized gains/losses on certain investments, not included in net income.