An adjusting entry would adjust revenue so it is reported when earned and not when cash is received.

Question

Quizplus · Accepted Answer

An adjusting entry is used to adjust revenue and expenses so they are reported when they are accrued or earned, regardless of when cash is received or paid. This is important for accurately reporting a company's financial performance and ensuring that financial statements reflect the economic reality of the business.

An Adjusting Entry Would Adjust Revenue So It Is Reported