Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 18 - No. 24)
What is the purpose of adjusting entries?
To correct errors made in the initial recording of transactions.
To bring account balances up to date at the end of an accounting period.
To record transactions that occurred during the period.
To provide detailed information about the cash flow.
Explanation
Adjusting entries are used to accurately reflect revenues and expenses in the period they occur, regardless of when cash changes hands.
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