The True Statement Is

question 43

Multiple Choice

The true statement is:

• A) reversing entries are always necessary.
• B) reversing entries are optional and are only made so that the accounting at the beginning of the new accounting period is less complicated.
• C) all prepayments need to be reversed.
• D) reversing entries are made on the last day of the financial year.

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Definitions:

Unadjusted Trial Balance

A report listing all the accounts and their balances before any adjusting entries are made, used to check the equality of debits and credits.

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenses to the period in which they actually occurred.

Close Account Year-End

The process of updating account balances and summarizing a company's financial activities to prepare for the next accounting period.