Adjusting Entries Are Needed

question 98

Multiple Choice

Adjusting entries are needed:

• A)Whenever revenue is not received in cash.
• B)Whenever expenses are not paid in cash.
• C)Only to correct errors in the initial recording of business transactions.
• D)Whenever transactions affect the revenue or expenses of more than one accounting period.

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Definitions:

After Taxes

The net amount remaining following the deduction of all applicable taxes, often used to assess the true profitability of a business activity or investment after federal, state, and other taxes have been considered.

Beta Coefficient

A gauge for assessing the risk or fluctuation level of a security or portfolio in relation to the entire market.

Risk-Free Rate

The theoretical rate of return on an investment with zero risk, typically represented by government bonds.

Market Risk Premium

The surplus earnings expected by investors for possessing a market portfolio with risks as opposed to secure, riskless assets.