Adjusting entries
A)Affect only income statement accounts.
B)Affect both income statement and balance sheet accounts.
C)Affect only balance sheet accounts.
D)Affect only statement of cash flows accounts.
E)Affect only equity accounts.

Question

Quizplus · Accepted Answer

Adjusting entries are made at the end of an accounting period to ensure that the financial statements accurately reflect the economic transactions that have occurred. These entries may affect both income statement accounts (such as revenue and expenses) and balance sheet accounts (such as assets, liabilities, and equity). Therefore, the best choice is B.

Adjusting Entries