Reversing Entries Are ________

question 51

Multiple Choice

Reversing entries are ________.

• A) the exact opposite of a prior adjusting entry
• B) dated the last day of the new period
• C) required according to GAAP
• D) expensive to record and time consuming

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Definitions:

External Cost

Costs that are not borne by the producers or users of a good or service, but rather by society or third parties, often not reflected in market prices.

Social Optimum

The most efficient allocation of resources that maximizes the overall benefit to society.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that suppliers are willing to sell.

Market

A place or virtual space where buyers and sellers come together to trade goods, services, or financial instruments, determining the prices through supply and demand.