Prior to recording adjusting entries at the end of an accounting period, some accounts may not show correct balances even though all transactions were properly recorded.

Question

Quizplus · Accepted Answer

This is true because certain transactions may not have been recorded yet or some expenses or revenues may have been accrued but not yet recognized in the accounts. Adjusting entries help ensure that accounts are updated and accurate before financial statements are prepared.

Prior to Recording Adjusting Entries at the End of an Accounting