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Questions and Answers
What is the purpose of adjusting entries in accounting?
What is the purpose of adjusting entries in accounting?
- To finalize the financial statements
- To reconcile bank statements
- To change account balances to the correct balance for accurate financial reporting (correct)
- To calculate the total revenue and expenses
When is an expense considered to be incurred in accounting?
When is an expense considered to be incurred in accounting?
- When the financial statement is prepared
- When the payment is made
- When the invoice is issued
- When the service is received (correct)
What is the purpose of a preliminary trial balance (unadjusted trial balance)?
What is the purpose of a preliminary trial balance (unadjusted trial balance)?
- To prepare financial statements
- To record adjusting entries
- To calculate the net income
- To check the accuracy of posting and prove the equality of debits and credits (correct)
What is the Periodicity Principle in accounting?
What is the Periodicity Principle in accounting?
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When does the calendar year end in accounting?
When does the calendar year end in accounting?
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