Adjusting Entries Are Needed

question 98

Multiple Choice

Adjusting entries are needed:

• A)Whenever revenue is not received in cash.
• B)Whenever expenses are not paid in cash.
• C)Only to correct errors in the initial recording of business transactions.
• D)Whenever transactions affect the revenue or expenses of more than one accounting period.

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Definitions:

Missing Funds

A situation where there is a discrepancy in expected and actual cash or assets, indicating possible errors or theft.

Journal Entry

The act of recording a transaction into the financial records of a company, detailing debits and credits in an accounting journal.

Deposit Recorded

The process of logging cash or checks received into the accounting records of a business or financial institution.

Outstanding Checks

Checks that have been written and recorded in the issuing company’s ledger but have not yet been cashed or cleared by the bank.