Accountıng I Deneme Sınavı Sorusu #1313684
What are the main purpose of adjusting entries in accounting?
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The main purpose of adjusting entries is to update the accounts to conform with the accrual concept. At the end of the accounting period, some income and expenses may have not been recorded, taken up or updated; hence, there is a need to update the accounts. |
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Adjusting Entries are not necessary every time financial statements are prepared. |
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Basic categories of adjusting entries are result of physical events. |
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The main purpose of adjusting entries is deferred expenses (prepaid expenses) on income statement. |
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The main purpose of adjusting entries is deferred expenses (prepaid expenses) on balance sheet. |
At the end of each accounting period, companies present their financial statements in order to communicate with information users. To present the company’s true and fair situation all accounts must be updated because recording some revenue and expense transactions are omitted during the period. That means some accounts must be adjusted, and some adjusting entries must be made.
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