It Is Correct That Each Balance Day Adjustment

question 13

Multiple Choice

It is correct that each balance day adjustment:

• A) affects either the income statement or the balance sheet.
• B) has at least one effect on the income statement and one effect on the balance sheet.
• C) only affects the income statement.
• D) always has an effect on the bank account.

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Definitions:

Compound Interest

Interest computed not only on the original amount invested or loaned but also on the interest that has been added to this principal over past periods.

Simple Interest

Interest computed solely on the initial sum, without accumulation through compounding.

Income Earned

Revenue generated from a person's job, investments, or business operations, excluding capital gains or gifts.

Annual Salary

The total amount of money earned by an employee in one year before taxes and deductions.