Why Are Adjusting Entries Required Before Closing the Books -

question 32

Multiple Choice

Why are adjusting entries required before closing the books -

• A) to record previously unrecorded purchases
• B) to record previously unrecorded sales
• C) to adjust all ledger accounts to their correct values at year end
• D) to record previously incorrect entries

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Definitions:

Agency Contract

A legal agreement wherein one party, the agent, agrees to act on behalf of another party, the principal, in business transactions.

Bound

Legally or morally obligated; a condition of being tied to an agreement or course of action.

Fictitious Principal

A non-existent entity created in a contractual agreement as the party for whom the agent acts.

Disclosing Identity

The act of revealing or making known one's identity.