Which of the following is an example of an adjusting entry?
A)Recording the increase in the market value of land.
B)Recording the salary expense earned in the last week of the year, to be paid next year.
C)Recording the receipt of inventory in the last week of the year that will be paid next year.
D)Recording the payment of year-end dividends.

Question

Quizplus · Accepted Answer

Adjusting entries are made to ensure that a company's financial records are accurate before preparing financial statements. Recording salary expense earned in the last week of the year, but not yet paid, is an example of an adjusting entry because it recognizes the expense in the period that it is earned, instead of when it is paid in the following year. The other options do not reflect adjusting entries.

Which of the Following Is an Example of an Adjusting