Which of the Following Statements Best Explains Why Adjustments Need

question 242

Multiple Choice

Which of the following statements best explains why adjustments need to be made at the end of every accounting period?

• A)Accountants like to do lots of unnecessary extra work.
• B)Certain accounts may need to be updated at the end of the period because of the presence of accruals and deferrals.
• C)To correct errors made during the period.
• D)Cash may be missing at the end of the period.

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Definitions:

Remodeling Expenses

Costs associated with making improvements or alterations to a building or structure to enhance its functionality or appearance.

Net Present Value

The economic distinction based on the present valuation of incoming versus outgoing cash flows during a fixed period.

Profitability Ratio

A class of financial metrics used to evaluate a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time.