Adjusting entries are
A) not necessary if the accounting system is operating properly.
B) usually required before financial statements are prepared.
C) made when the cash basis of accounting is used.
D) made to income statements accounts only.

Question

Quizplus · Accepted Answer

Adjusting entries are essential for the accrual basis of accounting, ensuring that revenues and expenses are recognized in the period in which they occur, rather than when cash is exchanged. This process helps in the accurate preparation of financial statements by aligning income and expenses with the correct accounting periods.

Adjusting Entries Are