Asked by Cherokee Fowler on Mar 10, 2024



Adjusting entries affect:

A) the balance sheet.
B) the income statement.
C) the cash account.
D) Both A and B are correct.

Adjusting Entries

Entries made in the books of account to correct or allocate income and expenses to the appropriate accounting period.

Balance Sheet

A balance sheet is a financial statement that provides a snapshot of a company's financial condition at a specific point in time, detailing assets, liabilities, and shareholders' equity.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenue, expenses, and net income.

  • Recognize the influence of adjusting entries on the financial position as reflected in the balance sheet and the profitability as shown in the income statement.

Verified Answer

Tyler LaHart

Mar 10, 2024

Final Answer :
Explanation :
Adjusting entries are made in the accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred. They affect both the balance sheet (by adjusting assets, liabilities, and equity accounts) and the income statement (by adjusting revenue and expense accounts). They do not typically affect the cash account directly, as they are adjustments for revenues earned or expenses incurred that have not yet been received or paid in cash.