One Way of Ensuring That Recurring Adjusting Journal Entries That

question 39

Multiple Choice

One way of ensuring that recurring adjusting journal entries that are needed each month are in fact made each month would be

• A)to make all the entries a month in advance.
• B)to rotate the responsibility among the accounting staff.
• C)to program the entries to be made automatically.
• D)to create a standard adjusting journal entry file.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds; it is the price paid for the use of borrowed money, or, for corporations, the price paid for the use of borrowed capital.

Contingent Liability

A potential financial obligation that may arise in the future depending on the outcome of an uncertain event or situation.

Probable Loss

A loss in financial terms that is likely to occur based on current information and judgment.

Reasonably Possible

A term used in accounting to describe a condition that could occur, affecting financial decisions or disclosures, based on current knowledge and events.