Which of the following cases would not require an adjusting entry?
A)a client has paid for services in advance
B)paid for three months rent in advance
C)capital stock has been issued for cash but not yet paid for
D)interest on a note receivable will not be received until the note is paid off next year

Question

Quizplus · Accepted Answer

Adjusting entries are required for transactions that have been incurred but not yet recorded in the accounts as of the end of the period. Option C, capital stock issued for cash but not yet paid for, does not require an adjusting entry because it involves an equity transaction that will be recorded when the cash is received, not as an adjustment for accrued revenues or expenses.

Which of the Following Cases Would Not Require an Adjusting