Adjusting entries are needed
A)to produce relevant financial information.
B)only under the cash basis of accounting.
C)to update accounts at the beginning of the accounting period.
D)for budgeting purposes.

Question

Quizplus · Accepted Answer

Adjusting entries are crucial for producing relevant and accurate financial information. They ensure that revenues and expenses are recognized in the period in which they occur, adhering to the accrual basis of accounting. This process helps in presenting a true and fair view of the company's financial position and performance.

Adjusting Entries Are Needed