A company must make adjusting entries each time it prepares an income statement and a statement of financial position.

Question

Quizplus · Accepted Answer

Adjusting entries are necessary to ensure that the financial statements accurately reflect the company's financial position and performance at the end of a period. Therefore, adjusting entries must be made before the preparation of the income statement and statement of financial position.

A Company Must Make Adjusting Entries Each Time It Prepares