Reversing Entries

question 102

Multiple Choice

Reversing entries:

• A) Are prepared on the worksheet.
• B) Are mandatory.
• C) Are optional.
• D) Correct errors in journal entries.
• E) Are required by GAAP.

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Definitions:

Common Shares

Equity securities that represent ownership in a corporation, providing voting rights and a portion of profits through dividends.

Generally Accepted Accounting Principles

The common set of accounting principles, standards, and procedures that companies use to compile their financial statements in the U.S.

Comparability Problems

Issues that arise when attempting to compare financial information due to differences in accounting policies or standards.

Inflation

The velocity at which the aggregate pricing for goods and services goes up, undermining the ability to buy.