Adjusting entries always include
A) only income statement accounts
B) only balance sheet accounts
C) the cash account
D) at least one income statement account and one balance sheet account

Question

Quizplus · Accepted Answer

Adjusting entries are made at the end of the accounting period to update the accounts and ensure that the financial statements are accurate. They typically involve at least one income statement account (such as revenue or expenses) and one balance sheet account (such as assets or liabilities). Therefore, the correct choice is D. Adjusting entries may or may not involve the cash account, depending on the nature of the adjustment.

Adjusting Entries Always Include