Which of the following is true regarding adjusting entries? a. Adjusting entries are dated as of the first day of the new accounting period. b. Adjusting entries are not posted to the ledger. c. Adjusting entries are usually recorded after the end of the period but are dated as of the last day of the period. d. Adjusting entries are optional with accrual-basis accounting.

Question

Business

Lewis

24 June, 09:42

Which of the following is true regarding adjusting entries? a. Adjusting entries are dated as of the first day of the new accounting period. b. Adjusting entries are not posted to the ledger. c. Adjusting entries are usually recorded after the end of the period but are dated as of the last day of the period. d. Adjusting entries are optional with accrual-basis accounting.

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Rodney Buck · Answer 1

Option C.

Explanation:

Adjusting entries are used in the recording of transactions which have occurred but have not yet been appropriately recorded in accordance with the accrual method of accounting. They are recorded in a company's general ledger at the end of an accounting period to abide by the matching and revenue recognition principles and the most common types of adjusting journal entries are accruals, deferrals, and estimates.

The objective of making use of adjusting entries is to convert cash transactions into the accrual accounting method. An adjusting entry will involve an income statement account along with a balance sheet account.