The Following Adjusting Journal Entry Does Not Include an Explanation

question 159

Multiple Choice

The following adjusting journal entry does not include an explanation. Select the best explanation for the entry.

• A) Adjust supplies inventory to actual.
• B) Record purchase of supplies.
• C) Reduce supplies expense.
• D) Record sale of supplies.

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Definitions:

Systematic Risk

The risk inherent to the entire market or market segment, which cannot be eliminated through diversification, often related to economic, political, or social factors.

Market Risk

Variation on the return on a stock investment caused by things that tend to affect all stocks.

Stand-Alone Risk

The risk associated with investing in a stock that’s held by itself, outside of a portfolio. Stand-alone risk depends on the volatility of a stock’s own return rather than on the effect its inclusion has on the volatility of the return of a portfolio.

Business Risk

The potential for loss or failure in the operation of a company, often due to external and internal factors.