Adjusting Journal Entries Are Normally Not Necessary When Cash Based

question 123

True/False

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

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Definitions:

Unrealised Gain

Profit that has been made on paper due to an increase in the value of an asset but has not yet been realized through a transaction.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against an asset over its useful life, reducing its book value on the balance sheet.

Parent Entity

A company that holds a controlling interest in another company or companies, usually through majority ownership of shares.