Which one of the following is not a justification for adjusting entries?
A) Adjusting entries are necessary to ensure that revenue recognition criteria are followed.
B) Adjusting entries are necessary to ensure that expense recognition criteria are followed.
C) Adjusting entries are necessary to enable financial statements to be in conformity with IFRS or ASPE.
D) Adjusting entries are necessary to bring the general ledger accounts in line with the budget.

Question

Quizplus · Accepted Answer

Adjusting entries are not made to align general ledger accounts with the budget; they are made to ensure that revenues and expenses are recorded in the correct accounting period, in accordance with accounting standards like IFRS or ASPE.

Which One of the Following Is Not a Justification for Adjusting