Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 10 - No. 7)
Why are adjusting entries important for accrual accounting?
To ensure financial statements reflect the economic reality of the business.
To ensure that revenues and expenses are recorded in the correct period.
To accurately measure a company's financial performance.
To make the balance sheet always balanced.
Explanation
Adjusting entries make sure that financial reports match actual economic activities.
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