Final answer:
Step 2 of year-end adjusting entries in the Periodic system involves recording any expenses or revenues that haven't been recorded yet.
Step-by-step explanation:
Step 2 of year-end adjusting entries in the Periodic system involves recording any expenses or revenues that haven't been recorded yet. These entries help to ensure that the financial statements reflect the correct income and expenses for the accounting period.
For example, if a company has provided services to a customer but hasn't recorded the revenue yet, they would make an adjusting entry to recognize the revenue in the appropriate account.
Similarly, if a company has incurred expenses but hasn't recorded them yet, they would make an adjusting entry to recognize the expenses.