Question

Are balance sheet accounts affected by adjustments?
1) Yes
2) No

Answer 1

Yes, balance sheet accounts can be affected by adjustments. The correct option is 1) Yes.

Step-by-step explanation:

Yes, balance sheet accounts can be affected by adjustments.

Adjustments are changes made to the financial statements to ensure accuracy and completeness. These adjustments can impact various accounts on the balance sheet, such as assets, liabilities, and equity.

For example, if an adjustment is made to recognize additional inventory, it will increase the asset account for inventory on the balance sheet. Alternatively, if an adjustment is made to accrue an expense that was previously unrecorded, it will increase the liability account for the expense on the balance sheet.