The Purpose of Adjusting Entries Is To

question 111

Multiple Choice

The purpose of adjusting entries is to:

• A)Prepare the revenue and expense accounts for recording the revenue and expenses of the next accounting period.
• B)Record certain revenue and expenses that are not properly measured in the course of recording daily routine transactions.
• C)Correct errors made during the accounting period.
• D)Update the owners' equity account for the changes in owners' equity that had been recorded in revenue and expense accounts throughout the period.

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Definitions:

Economic Gain

The increase in financial value or benefit that results from an investment or action.

Rational Consideration

The process of systematically evaluating available options based on logic, facts, and objective criteria before making a decision.

Management Approach

Strategies, philosophies, or methods adopted by leadership in governing, directing, and administering an organization to achieve its goals.

ISO Certification

Conformance with a rigorous set of international quality standards.