Adjusting entries are unnecessary for transactions that do not involve revenue or expense activities,such as selling common stock or paying dividends.

Question

Quizplus · Accepted Answer

Adjusting entries are typically made to update revenue and expense accounts to reflect the true financial position at the end of an accounting period. Transactions like selling common stock or paying dividends do not affect revenue or expenses, so they do not require adjusting entries.

Adjusting Entries Are Unnecessary for Transactions That Do Not Involve