Each adjusting entry affects at least one income statement account and at least one statement of ﬁnancial position account.

Question

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Adjusting entries are made at the end of an accounting period to ensure that the income statement and statement of financial position are accurate and up-to-date. As a result, at least one income statement account and at least one statement of financial position account are affected by each adjusting entry.

Each Adjusting Entry Affects at Least One Income Statement Account