Question

It is acceptable that some adjusting entries contain estimated amounts.
a) true
b) false

Answer 1

Adjusting entries in accounting can contain estimated amounts.

Step-by-step explanation:

True. It is acceptable that some adjusting entries contain estimated amounts in accounting.

Adjusting entries are journal entries made at the end of an accounting period to ensure that revenues and expenses are properly recorded. These entries often involve estimating certain amounts, such as depreciation expense or bad debt expense.

For example, if a company estimates that $10,000 worth of its accounts receivable will not be collected, it would make an adjusting entry to record this estimated bad debt expense.