1. An adjusting entry a) affects at least two balance sheet accounts b) affects at least...

1. An adjusting entry

a) affects at least two balance sheet accounts

b) affects at least two income statement accounts

c) always involves a contra-account entry

d) affects a balance sheet account and an income statement account

2. On a balance sheet, current assets are often listed

a) in alphabetical order

b) with the largest monetary amounts first

c) in the order of liquidity

d) in the order of acquisition

Solutions

Expert Solution

Adjustment Entry – Adjustment entry shows an economic unrecorded activity that has already been taken place but not yet been recorded in the books of account.

Every adjustment entry affects at least one income statement account (revenue or expense) and one balance sheet account (asset, liability, or equiry).

The correct option is D) affects a balance sheet account and an income statement account

On balance sheet, current assets are often listed in the order of liquidity.

Hence, the correct option is c) in the order of liquidity

ekkarill92 answered 2 years ago

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