If adjustments to the financial statements were not made,what would be the effect on the financial results?
A)The financial statements would present an incomplete and misleading picture of the company's financial performance.
B)There would be little effect because any items not recognized in the reporting period would be recognized in the next reporting period.
C)No effect would result because adjustments do not reflect cash paid or received.
D)There would be no effect because some adjustments increase net income and others decrease it,cancelling each other out.

Question

Quizplus · Accepted Answer

The adjustments are made to help ensure that all revenues and expenses are reported in the period in which they are earned or incurred.As a result of these adjustments,the financial statements present the best picture of whether the company's business activities were profitable that period and what economic resources the company owns and owes at the end of that period.Without these adjustments,the financial statements present an incomplete and misleading picture of the company's financial performance.

If Adjustments to the Financial Statements Were Not Made,what Would