A File That Stores Core Information Important to the Business

question 13

True/False

A file that stores core information important to the business is an audit file.

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Definitions:

Accounting Adjustments

Entries made in the accounts to correct transactions, record unrecorded items, or bring accounts up to date at period end.

Financial Statements

Materials outlining a firm's financial health, incorporating its balance sheet, income statement, and cash flow statement.

Adjustment

Modifications made to account balances in order to correct financial statements or to allocate transactions correctly.

Accrual Accounting

An accounting method that recognizes revenue and expenses when they are incurred, not necessarily when cash is exchanged, enhancing the accuracy of financial statements.