Which of the following is an example of an adjusting entry?
A) Recording the payment of year-end dividends.
B) Recording the receipt of inventory in the last week of the year that will be paid next year.
C) Recording the salary expense earned in the last week of the year, to be paid next year.
D) Recording the increase in the market value of land.

Question

Quizplus · Accepted Answer

Adjusting entries are made in the accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred. The entry for recording salary expense earned in the last week of the year, to be paid next year (C), is an example of an adjusting entry because it allocates expenses to the period in which the salaries were earned, not when they were paid.

Which of the Following Is an Example of an Adjusting