Question

Which of the following is true about adjusting entries? A. Entries can be done at the beginning or end of the accounting period. B. They are a necessary part of accrual-basis accounting. C. They zero the balance of all income statement accounts. D. Entries are necessary due to the conservatism principle.

Answer 1

Answer:

B. They are a necessary part of accrual-basis accounting.

Explanation:

Adjusting entries are entries recorded in an accounting journal at the end of an accounting period so that the revenue and expenses of a company will be in alignment with the accrual accounting concept.

There are 5 types of adjusting entries, deferred expenses, depreciation expenses, accrued expenses, accrued revenue, and deferred revenue.