Question

When would you enter a journal entry?

1) To correct errors (if you have a strong accounting background)
2) For year-end adjustments
3) To enter depreciation
4) All of the above

Answer 1

Journal entries are used in accounting to correct errors, make year-end adjustments, and record depreciation.

Step-by-step explanation:

Journal entries are used in accounting to record various transactions and events. They are typically used for correcting errors, making year-end adjustments, and recording depreciation.

1) To correct errors: Journal entries are used to correct any mistakes made in the original recording of transactions. For example, if an expense was wrongly categorized, a journal entry can be made to correct it.

2) For year-end adjustments: Journal entries are made at the end of an accounting period to ensure that the financial statements reflect accurate and up-to-date information. Examples of year-end adjustments include recognizing accrued expenses or adjusting the value of prepaid assets.

3) To enter depreciation: Journal entries are used to record the depreciation of assets over time. This helps in spreading the cost of the asset over its useful life and accurately reflecting its value on the financial statements.

Therefore, the correct answer is 4) All of the above.