Question

An adjusting entry is completed_________.

-after all performance obligations are satisfied
-at the beginning go the accounting period
-at the end of the accounting period
-when accounts need to be balanced in the ledger

Answer 1

An adjusting entry is completed at the end of the accounting period to update the financial statements.

Step-by-step explanation:

An adjusting entry is completed at the end of the accounting period. These entries are made to ensure that the financial statements accurately reflect the financial position of the business. They are necessary to update revenue and expense accounts, as well as to recognize any accrued or prepaid expenses.

For example, if a business had an unpaid utility bill at the end of the accounting period, an adjusting entry would be made to record the expense and the corresponding liability. This ensures that the financial statements show the true amount owed.