Which of the Following Is the Best Example of a Short-Run

question 183

Multiple Choice

Which of the following is the best example of a short-run adjustment?

• A) A local bakery purchases another commercial oven as part of its capacity expansion.
• B) Your local Wal-Mart hires two more associates.
• C) Smith University completed negotiations to acquire a large piece of land to build its new library.
• D) Toyota builds a new assembly plant in Texas.

---

Definitions:

Permanent/Temporary

Categories of accounting items: permanent (or real) accounts carry their ending balances into the next accounting period, and temporary (or nominal) accounts are closed at the end of every period.

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenditures to the appropriate period.

Reversed

Changed to the opposite direction, order, position, or condition, often referring to financial transactions or entries.

Adjusting Entries

Entries made in accounting records at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.