Adjusting entries are:
made whenever management desires to change an account balance.
not necessary if the accounting system is operating properly
not recorded in the ledger accounts because they don’t affect cash.
Correct!
usually required before financial statements are prepared.
made to Statement of Financial Position accounts only.
Adjusting entries are:
usually required before financial statements are prepared.
These entries are necessary to ensure that financial statements accurately reflect the economic events that have occurred during the accounting period, even if cash has not yet been exchanged or if the transactions relate to a different period. They help in matching expenses with revenues and maintaining the accrual basis of accounting.
