Asked by Alessandro Godina on Jun 19, 2024
Verified
What is the difference between a correcting entry and an adjusting entry?
A) Correcting entries are updates required to bring accounts to the correct balances as of a certain date.Adjusting entries fix mistakes in the accounting system.
B) Correcting entries require one journal entry to fix and adjusting entries require two entries to fix.
C) Correcting entries fix mistakes in the accounting system.Adjusting entries are not mistakes but updates required to bring accounts to the correct balances as of a certain date.
D) Correcting entries and adjusting entries are the same type of entry just labelled differently.
Correcting Entry
An accounting entry made to correct an error in the ledger.
Adjusting Entry
A journal entry made at the end of an accounting period to allocate income and expenditures to the appropriate period.
Accounting System
A systematic process of recording, summarizing, and reporting the financial transactions of a business or individual.
- Distinguish between correcting entries and adjusting entries.
Verified Answer
MB
michael brianJun 22, 2024
Final Answer :
C
Explanation :
Correcting entries are made to correct errors in the accounting records, while adjusting entries are made to account for accruals, deferrals, and other adjustments necessary to ensure financial statements are accurate on an accrual basis.
Learning Objectives
- Distinguish between correcting entries and adjusting entries.
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