Question

Which one of the following is nota reason for which adjusting entries are made?

A) To update revenue and expense accounts
B) To correct errors or omissions in the initial recording
C) To close temporary accounts at the end of the accounting period
D) To record routine day-to-day transactions

Answer 1

The reason not related to adjusting entries is 'To record routine day-to-day transactions.' Adjusting entries are made to update accounts, correct errors, and prepare for financial statements, not for daily transaction recording.

Step-by-step explanation:

The student has asked which one of the following is not a reason for which adjusting entries are made. The correct answer is D) To record routine day-to-day transactions. Adjusting entries are usually made at the end of an accounting period to update revenue and expense accounts to reflect the earnings and expenditures accurately. These entries are used to correct errors or omissions, to update accounts before preparing financial statements, and not to record routine transactions, which should be captured in daily transactions. They also are not directly tied to the process of closing temporary accounts, which is a separate step in the accounting cycle.