Adjusting entries are required
A) because some costs expire with the passage of time and have not yet been journalized.
B) when the company's profits are below the budget.
C) when expenses are recorded in the period in which they are earned.
D) when revenues are recorded in the period in which they are earned.

Question

Quizplus · Accepted Answer

Adjusting entries are necessary to account for costs that expire or are used up over time and have not yet been recorded in the journal. This ensures that the financial statements accurately reflect the company's financial position by matching expenses to the periods in which they are incurred.

Adjusting Entries Are Required