Describe the End-Of-The-Period Adjustment Process.Why Is It Necessary

question 27

Essay

Describe the end-of-the-period adjustment process.Why is it necessary?

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Definitions:

Owner's Equity

The residual interest or ownership claim in the assets of an entity after deducting its liabilities.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders’ equity at a specific point in time.

Liabilities

Financial obligations or debts a company owes to external parties or entities.

Statement of Cash Flows

A financial statement that provides aggregate data regarding all cash inflows and outflows a company receives from its ongoing operations, financial activities, and investment activities.