Adjusting Journal Entries Are Normally Not Necessary When Cash-Basis Accounting

question 161

True/False

Adjusting journal entries are normally not necessary when cash-basis accounting is used.

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Definitions:

Balance Sheet

A financial statement that shows the assets, liabilities, and owner's equity of a company at a specific point in time.

Statement Of Owner's Equity

A financial document detailing the changes in the ownership interest of a company over a period, including investments and withdrawals.

Capital

The wealth in the form of money or assets owned by a person or business, used for starting a business or to invest.

Total Liabilities

The combined amount of a company's short-term and long-term financial obligations.