Asked by Kailey Schroeder on May 08, 2024
Verified
An adjusting entry would adjust an expense account so the expense is reported when incurred.
Adjust Expense
The process of allocating expenses incurred in one period to the correct period, often through adjusting entries in the accounting records.
Reported
Information that has been formally communicated or disclosed, often referring to financial data or significant events in a company.
- Familiarize oneself with the principles of revenue recognition and the matching principle as pivotal to accrual accounting.
- Acquire knowledge of the rationale behind adjusting entries and their significance in the accounting process.
Verified Answer
NM
Natalya MynykMay 14, 2024
Final Answer :
True
Explanation :
Adjusting entries are made to ensure that financial statements reflect the correct financial position of a company. An adjusting entry may adjust an expense account so that the expense is reported when it is incurred, even if the cash payment for the expense has not yet been made. This ensures that expenses are properly matched to the period in which they were incurred, which is a key accounting principle.
Learning Objectives
- Familiarize oneself with the principles of revenue recognition and the matching principle as pivotal to accrual accounting.
- Acquire knowledge of the rationale behind adjusting entries and their significance in the accounting process.
Related questions
The Revenue Recognition Principle Requires That the Reporting of Revenue ...
Accruals Are Needed When an Unrecorded Expense Has Been Incurred ...
The Revenue Recognition Principle States That Revenue Should Be Recorded ...
An Adjusting Entry Would Adjust Revenue So It Is Reported ...
The Matching Principle Supports Matching Expenses with the Related Revenues