Adjusting entries affect at least one
A) income statement account and one balance sheet account
B) revenue and the dividends account
C) asset and one owner's equity account
D) revenue and one owner's equity account

Question

Quizplus · Accepted Answer

Adjusting entries are made at the end of an accounting period to update accounts that have not been recorded in the regular accounting cycle. These entries affect both income statement and balance sheet accounts, usually by increasing or decreasing one or more accounts. A typical adjusting entry involves a balance sheet account (such as prepaid expenses, accrued liabilities, or unearned revenues) and an income statement account (such as rent expense, salaries expense, or interest income). Therefore, the best choice is A, as it represents the most common scenario for adjusting entries. The other choices (B, C, and D) are not correct, as they do not cover all the possible accounts affected by adjusting entries.

Adjusting Entries Affect at Least One