Adjusting Entries

question 100

Multiple Choice

Adjusting entries:

• A) Affect only income statement accounts.
• B) Affect only equity accounts.
• C) Affect cash accounts.
• D) Affect only balance sheet accounts.
• E) Affect both income statement and balance sheet accounts.

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Definitions:

Direct Expense

Costs that can be directly tied to the production of specific goods or servicing of specific services, such as raw materials and labor.

Painting Department

The painting department is a specific section within a manufacturing or production company responsible for painting and finishing products.

Income

Income is the financial gain earned or received by an individual or entity, typically through work, investments, or business operations.

Departments

Distinct units within an organization, each focusing on a specific area of the business or a particular line of products or services.