A Reversing Entry Should Not Be Made for an Adjusting

question 42

Multiple Choice

A reversing entry should not be made for an adjusting entry to record

• A) the accrued salaries.
• B) an accrued expense item that will involve future cash payments.
• C) an accrued income item that will involved future cash receipts.
• D) depreciation.

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Definitions:

Cash Dividend

A cash distribution given to shareholders from a company's earnings.

Unlimited Liability

A legal structure in business where the owners are personally responsible for all of the company's debts, putting their personal assets at risk.

Partnership Form

A lawful business arrangement where two or more people share both the management responsibilities and the profits.

Interest Allowance

An amount allowed for interest, which can refer to the interest expense permitted on debt or the interest credited to an account; specifics can vary based on context.