6.2k views
3 votes
Which one of the following is not a justification for adjusting entries?

a. Adjusting entries are necessary to ensure that the expense recognition principle is followed.
b. Adjusting entries are necessary to bring the general ledger accounts in line with the budget.
c. Adjusting entries are necessary to enable financial statements to be in conformity with GAAP.
d. Adjusting entries are necessary to ensure that the revenue recognition principle is followed.

User Wu Wei
by
7.0k points

1 Answer

3 votes

Answer:

The correct answer is b. Adjusting entries are necessary to bring the general ledger accounts in line with the budget.

Step-by-step explanation:

An accounting adjustment is a regularization that the company has to do, usually at the end of the year, to correctly allocate income, expenses, assets and liabilities to their corresponding fiscal years.

They are necessary accounting corrections to obtain the accounting result correctly. Although the accounting adjustments affect both assets and liabilities and income and expenses, the most important are those that affect the latter, since they will modify the accounting result.

User Musthafa
by
6.6k points