One of the major advantages of making adjustments in order to improve the quality of financial statements is that they:

Question

Quizplus · Accepted Answer

Making adjustments to improve the quality of financial statements ensures that revenues and expenses are recognized during the period they are earned and incurred. This is important for accuracy and reliability of the financial statements. Option B is incorrect because estimates are sometimes required for predicting future events and cannot be eliminated entirely. Option C is incorrect because recognizing revenues and expenses conservatively may not always reflect the true economic activity and may not be appropriate in all situations.

One of the Major Advantages of Making Adjustments in Order