The preparation of adjusting entries
A) is straight-forward because the accounts that need adjustment will be out of balance.
B) requires an understanding of the company's operations and the inter-relationship of accounts.
C) is only required for accounts that do not have a normal balance.
D) is optional when financial statements are prepared.

Question

Quizplus · Accepted Answer

Adjusting entries require an understanding of the company's operations and the inter-relationship of accounts to ensure that revenues and expenses are recorded in the correct accounting period.

The Preparation of Adjusting Entries