Which of the following statements is true?
A)Adjusting entries contain only balance sheet accounts.
B)Adjusting entries contain only income statement accounts.
C)Adjusting entries contains an income statement account and a balance sheet account.
D)none of the answers listed.

Question

Quizplus · Accepted Answer

Adjusting entries are made at the end of an accounting period to update the accounts before preparing financial statements. These entries can include both income statement accounts (such as revenue and expenses) and balance sheet accounts (such as prepaid expenses and accrued liabilities). Therefore, option C is correct. Option A and B are incorrect because adjusting entries can contain both types of accounts. Option D is incorrect because one of the options listed is correct.

Which of the Following Statements Is True