Which of the following is not a purpose of adjusting entries?
A)To prepare the revenue and expense accounts for recording transactions of the following period.
B)To apportion the proper amounts of revenue and expense to the current accounting period.
C)To establish the proper amounts of assets and liabilities in the balance sheet.
D)To accomplish the objective of offsetting the revenue of the period with all the expenses incurred in generating that revenue.

Question

Quizplus · Accepted Answer

Adjusting entries are made to update the accounts to their correct balances before financial statements are prepared. Their purposes include apportioning revenue and expenses to the period in which they actually occurred (B), establishing the correct amounts of assets and liabilities (C), and matching revenues with the expenses incurred to generate them (D). They are not made to prepare revenue and expense accounts for recording transactions in the following period; rather, they ensure that the financial statements of the current period accurately reflect the company's financial position and performance.

Which of the Following Is Not a Purpose of Adjusting