Which Adjustment Would Never Require a Reversing Entry

question 62

Multiple Choice

Which adjustment would never require a reversing entry?

• A) Accrued revenue
• B) Accrued expense
• C) Prepaid income (cash received originally recorded in an income account)
• D) Depreciation

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Definitions:

Physical Units

A measure of quantity in terms of countable items or units, often used in production and inventory contexts.

Units Started

Units Started refers to the quantity of production units that have begun the manufacturing process in a given period but may not yet be completed.

Ending Work

Refers to the work in process (WIP) at the end of an accounting period, used in calculating the cost of goods manufactured.

Equivalent Units

A concept used in process costing, converting partially finished goods into a number of completed units for accounting purposes.