The Income Statement Columns on the Worksheet Are Not Equal

question 56

Multiple Choice

The income statement columns on the worksheet are not equal because:

• A) a mistake has been made in the adjustments section.
• B) the columns have not been added up correctly.
• C) the unadjusted trial balance was incorrect.
• D) the difference is the profit or loss for the period.

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Definitions:

Reasonably Estimated

A valuation or measurement that can be calculated with a reasonable level of accuracy, often applied in accounting for provisions and contingencies.

Fair Value Option

The choice given to companies to report financial assets and liabilities at estimates of their current market value, rather than at historical cost or using other valuation methods.

Accounting-induced Volatility

Accounting-induced volatility is the fluctuation in financial metrics or stock prices resulting from changes in accounting principles or practices.

Financial Statement Transparency

The clarity, accuracy, and completeness with which a company's financial situation, performance, and changes are reported in its financial statements.