One of the major advantages of making adjustments in order to improve the quality of financial statements is that they:
A)ensure that revenues and expenses are recognized during the period they are earned and incurred.
B)ensure that all estimates of future activities are eliminated from consideration.
C)ensure that revenues and expenses are recognized conservatively during the period in which they are paid.
D)provide an opportunity to manipulate the numbers to the best advantage of the reporting company.

Question

Quizplus · Accepted Answer

Adjustments need to be made at the end of an accounting period to (1)update amounts already recorded in the accounting records and (2)include events that occurred but had not yet been recorded.Without these adjustments,the financial statements present an incomplete and misleading picture of the company's financial performance.Proper counting is critical to income measurement,but estimation also plays a role.

One of the Major Advantages of Making Adjustments in Order