Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 18 - No. 23)
How are adjusting entries used in financial accounting?
To record transactions that have already occurred.
To correct errors in the general ledger.
To ensure revenues and expenses are recognized in the correct period.
To summarize account balances for the year.
Explanation
Adjusting entries are used to apply the matching principle and recognize revenues and expenses in the correct period.
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