Adjusting entries are needed
A) every time cash is received.
B) every time financial statements are prepared.
C) every time expenses are incurred or revenue is performed.
D) never if you are reporting on an annual basis.

Question

Quizplus · Accepted Answer

Adjusting entries are necessary every time financial statements are prepared to ensure that the accounts accurately reflect the company's financial position and performance. These entries are typically made at the end of an accounting period to record accrued expenses, prepaid expenses, accrued revenues, unearned revenues, depreciation, and other items that have not yet been recorded. Adjusting entries are a critical part of the accounting cycle and help ensure the accuracy of financial statements. They are not needed every time cash is received or expenses are incurred or revenue is performed, and they are not only made if reporting on an annual basis.

Adjusting Entries Are Needed