Adjusting entries are required before closing the books -
A)to record previously unrecorded purchases
B)to record previously unrecorded sales
C)to adjust all ledger accounts to their correct values at year end
D)to adjust previously incorrect entries

Question

Quizplus · Accepted Answer

Adjusting entries are required at the end of an accounting period to rectify any mistakes or discrepancies in the ledger accounts, and to ensure that all accounts reflect their correct values at the year-end. Adjusting entries are not used to record previously unrecorded purchases or sales, as these should have been entered into the system at the time they occurred. Similarly, adjusting entries are not used to correct previously incorrect entries, as these should have been rectified when the error was discovered.

Adjusting Entries Are Required Before Closing the Books -