Which of the following statements is incorrect?
A)Prepaid expenses,depreciation,and unearned revenues involve previously recorded assets and liabilities.
B)Accrued expenses and accrued revenues involve assets and liabilities that were not previously been recorded.
C)Adjusting entries can be used to record both accrued expenses and accrued revenues.
D)Prepaid expenses,depreciation,and unearned revenues often require adjusting entries to record the effects of the passage of time.
E)Adjusting entries affect the cash account.

Question

Quizplus · Accepted Answer

Adjusting entries do not affect the cash account directly. They are made to update the accounts that reflect the correct financial position of the organization at the end of the period. Adjusting entries impact the income statement and the balance sheet accounts.

Which of the Following Statements Is Incorrect