Question

Indicate with a Yes or No whether or not each of the following accounts normally requires an adjusting entry:

a. Building
b. Cash

Answer 1

Yes, the account 'Building' normally requires an adjusting entry, while the account 'Cash' does not.

Step-by-step explanation:

Yes, the account 'Building' normally requires an adjusting entry.

Buildings are long-term assets that undergo depreciation over time, which requires adjusting entries to allocate the depreciation expense. For example, at the end of each accounting period, a portion of the building's cost is expensed to match its wear and tear.

No, the account 'Cash' normally does not require an adjusting entry. Cash is a current asset account, and its balance is updated continuously as cash inflows and outflows occur during the accounting period.