An adjusting entry would adjust revenue so that it is reported when earned and not when cash is received.

Question

Quizplus · Accepted Answer

Adjusting entries are made at the end of an accounting period to ensure that financial statements accurately reflect the financial position and performance of a business. One common adjusting entry is to recognize revenue that has been earned but not yet received in cash. This ensures that revenue is reported in the period in which it was earned, regardless of when cash is received.

An Adjusting Entry Would Adjust Revenue So That It Is