The reason it is necessary to prepare adjusting entries at the end of the financial year is:
A) to correct errors made during the year.
B) to provide as accurate a profit measurement as possible.
C) to prepare the ledger for the next accounting period.
D) to close the accounts.

Question

Quizplus · Accepted Answer

Adjusting entries at the end of the financial year ensure that revenues and expenses are recorded in the correct period, which provides a more accurate measure of profit for the year. This ensures that financial statements reflect the true financial position of the company.

The Reason It Is Necessary to Prepare Adjusting Entries at the End