Question

How do adjustments affect financial results? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

Answer 1

Answer:

In simple words, Prior to filing financial reports, extra journal entries, named correction reports, are produced to strengthen the financial documents of the organisation conform to the standards of revenue identification and alignment.

Adjustment entries are required since a single item might influence profits or expenditures over a span of more for one accounting cycle but also because not all transactions were automatically recorded over the time period.

Each change entry typically affects one financial report of revenue (a financial of income or expenditure) and one report balance sheet (an account of assets or liabilities).