Adjusting entries affect
A) the balance sheet.
B) the income statement.
C) Neither of these answers is correct.
D) Both A and B are correct.

Question

Quizplus · Accepted Answer

Adjusting entries affect both the balance sheet and the income statement. The purpose of adjusting entries is to ensure that the financial statements accurately reflect the company's financial position and performance. Adjusting entries can impact accounts on both the balance sheet, such as prepaid expenses, and the income statement, such as accrued revenue or expenses. Therefore, both options A and B are correct.

Adjusting Entries Affect