Adjusting entries affect only the cash flows of the current period.

Name: Adjusting entries affect only the cash flows of the current period.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Adjusting entries do not directly affect cash flows of the current period, but rather affect the recognition of revenues and expenses in the financial statements. They may indirectly impact cash flows through changes in accruals and adjusting balances, but their primary purpose is to ensure accurate and reliable financial reporting, not to impact cash flows.

Adjusting Entries Affect Only the Cash Flows of the Current