An adjusting entry
A) affects two statement of financial position accounts.
B) affects two income statement accounts.
C) affects a statement of financial position account and an income statement account.
D) is always a compound entry.

Question

Quizplus · Accepted Answer

An adjusting entry affects a statement of financial position account (such as prepaid expenses or accrued expenses) and an income statement account (such as revenue or expenses) to properly reflect the financial position and performance of the company. Therefore, option C is the correct choice.

An Adjusting Entry