Adjusting Entries Are

question 229

Multiple Choice

Adjusting entries are

• A) not necessary if the accounting system is operating properly.
• B) usually required before financial statements are prepared.
• C) made whenever management desires to change an account balance.
• D) made to balance sheet accounts only.

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Definitions:

Proprietorships

A business structure where a single individual owns and runs the business, bearing unlimited liability for its debts and obligations.

Partnerships

A business organization legally constituted by multiple individuals who jointly manage the enterprise and share in its profits.

Corporations

Legal entities that are separate from their owners, capable of owning assets, incurring liabilities, and being taxed; they raise capital through issuing stock.

Standard-Setting Environment

The framework and processes through which authoritative accounting principles and standards are developed and implemented.