Adjustments would not be necessary if financial statements were prepared to reflect net income from

Question

Quizplus · Accepted Answer

Adjustments are necessary for preparing financial statements for specific periods (monthly, fiscal year, or interim operations) to account for accrued revenues, expenses, and other adjustments. However, if financial statements were prepared to reflect net income from lifetime operations, adjustments would not be necessary because all revenues and expenses would be recognized over the entity's entire lifespan, eliminating the need for periodic adjustments.

Adjustments Would Not Be Necessary If Financial Statements Were Prepared