All of the Following Regarding Reversing Entries Are Except

question 133

Multiple Choice

All of the following regarding reversing entries are except:

• A) Reversing entries are optional.
• B) Reversing entries are recorded in response to accrued assets and accrued liabilities that were created by adjusting entries at the end of the previous accounting period.
• C) Reversing entries are used to simplify a company's recordkeeping.
• D) Reversing entries are dated the first day of the new accounting period.
• E) Reversing entries are not the exact opposite of adjusting entries.

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Definitions:

Cost of Goods Sold

The immediate expenses linked to the manufacture of goods a company sells, which covers both materials and workforce.

Material

Substances or components that are used in the production or manufacturing of goods.

Underapplied Overhead

Happens when the overhead costs assigned to manufacturing are lower than the overhead expenses that were actually incurred.

Actual Overhead

Actual overhead refers to the direct costs actually incurred by a business for operations, including utilities, rent, and maintenance expenses.