Why are adjusting entries recorded at the end of the accounting period?
A)The Cash account must be adjusted for the effects of the daily transactions with customers and creditors.
B)The company's accounts must be adjusted to ensure that debits are equal to credits prior to preparing the trial balance.
C)Unrecorded accruals and deferrals must be recognized before the financial statements can be prepared.
D)The data from the temporary accounts (revenues,expenses,and dividends)must be moved into the retained earnings account.

Question

Quizplus · Accepted Answer

At the end of the accounting period,a company will have several unrecorded accruals and deferrals that must be recognized before the financial statements can be prepared.As a result,adjusting entries always involve (1)an asset or liability account and (2)a revenue or expense account.

Why Are Adjusting Entries Recorded at the End of the Accounting