Adjusting entries are necessary to
A)obtain a proper matching of revenue and expense.
B)achieve an accurate statement of assets and equities.
C)adjust assets and liabilities to their fair market value.
D)both a and b

Question

Quizplus · Accepted Answer

Adjusting entries are made to ensure that revenues and expenses are properly matched in the period they occur (option A) and to achieve an accurate statement of assets and equities (option B). Adjusting entries are not made to adjust assets and liabilities to their fair market value (option C) as this is done through valuation techniques, such as appraisals and market analysis, and not through adjusting entries.

Adjusting Entries Are Necessary to