Final Answer:
At the end of the period, certain accounts may require adjustments to ensure accurate financial reporting.
1) Yes, it needs to be adjusted.
Step-by-step explanation:
In the case of 1), adjustments are needed. One common example is the accrual of expenses. For instance, if the company incurred expenses but has not yet paid for them by the end of the period, an adjustment is necessary to recognize the expenses and accurately reflect the financial position. This ensures that the financial statements present a true and fair view, aligning with the accrual accounting principles.
Adjustments are also crucial for revenue recognition. If the company has earned revenue but has not yet received payment, an adjustment is necessary to recognize the revenue. This aligns with the matching principle, ensuring that revenues and their related expenses are recorded in the same accounting period, providing a more accurate representation of the company's performance.
In summary, 1) requires adjustment as part of the standard accounting process to ensure that the financial statements accurately depict the financial position and performance of the company. Adjustments are fundamental to the accrual accounting system, allowing for a more accurate reflection of economic activities, even if cash transactions haven't occurred by the end of the reporting period.
Therefore, the correct option is 1.Yes, it needs to be adjusted