Which statement about adjusting entries is false?
Before an adjusting entry for prepaid expense is recorded, assets will be overstated, and expenses will be understated.
Correct!
Adjusting entries are recorded in the general journal but are not posted to the accounts in the general ledger.
Adjusting entries affect a statement of financial position account and an income statement account.
An adjusting entry would adjust a revenue transaction, so it is reported when the revenue is earned.
Adjusting entries are often made because some business events are not recorded as they occur.
The false statement about adjusting entries is:
Adjusting entries are recorded in the general journal but are not posted to the accounts in the general ledger.
This statement is incorrect because adjusting entries are typically recorded in the general journal and then posted to the appropriate accounts in the general ledger to ensure that the ledger reflects the correct balances.
