Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 37 - No. 47)
What is the purpose of adjusting entries?
To record transactions that have already been recorded.
To correct errors made in the general journal.
To ensure that revenues and expenses are recognized in the correct accounting period.
To balance the cash flow of the business.
Explanation
Adjusting entries ensure that financial statements accurately reflect the economic performance of a business by matching revenues and expenses to the correct period.
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