In Which of the Following Situations Would an Adjusting Entry

question 45

Multiple Choice

In which of the following situations would an adjusting entry be made at the end of January to record an accrued expense?

• A)Ramona's Nursery purchased playground equipment on January 1 with an estimated useful life of six years.
• B)On January 25,Ramona's Nursery hired a college student to drive the minibus;the new employee is to begin work in February.
• C)January 31 falls on a Tuesday;salaries are paid on Friday of each week.
• D)On January 31,Ramona's Nursery paid the interest owed on a note payable for January.

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Definitions:

Gross Profit

The difference between revenue and the cost of goods sold before deducting overheads, payroll, taxes, and interest payments.

Sales Returns

Sales Returns are transactions where customers return previously purchased merchandise, leading to a reduction in sales revenue for the seller.

Office Supplies

Items used in offices such as paper, pens, and other consumables necessary for day-to-day operations.

Departmental Income Statements

are financial statements that report the income, expenses, and net income of individual departments within a company.