Questions and Answers
What is the purpose of adjusting entries in accounting?
To update accounts and recognize revenues and expenses on an accrual basis
Which financial statements do adjusting entries affect?
Both balance sheet and income statement
What do adjusting entries help to achieve in terms of account balances?
Update and correct account balances at the end of the accounting period
What is the impact of adjusting entries on revenue and expenses?
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Why are corrected balances essential for a company?
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