In which of these circumstances are adjusting journal entries made at the end of the period?

Question

Quizplus · Accepted Answer

Adjusting journal entries are made at the end of the period when cash receipts and payments occur before or after the point when revenues and expenses should be recognized under accrual accounting. This is done to ensure that financial statements reflect the accurate financial position of the company. The use of cash basis accounting or reporting revenue in the same period that cash is collected may also require adjusting entries, but these circumstances do not necessarily guarantee the need for adjusting entries at the end of the period. Management adjustments on the statement of cash flows do not affect the need for adjusting entries at the end of the period.

In Which of These Circumstances Are Adjusting Journal Entries Made