Adjusting entries are prepared at the end of the accounting period to update certain accounts. These entries are necessary to ensure that all revenue and expenses are recognized in the proper accounting period, in accordance with the accrual basis of accounting. Adjusting entries are a crucial step in the accounting cycle and are necessary to ensure accurate financial statements.

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Adjusting Entries

Question 27

Multiple Choice

Adjusting entries:

A) are prepared at the option of the accountant
B) are not needed under the accrual basis of accounting
C) are prepared at the beginning of the accounting period to update all accounts
D) are prepared at the end of the accounting period to update certain accounts

Correct Answer: