Answer:
c. asset
Step-by-step explanation:
Adjusting entries ensure that asset balances are reported at amounts representing the economic benefits that remain at the end of the period. This is because adjusting entries are a type of accounting entry that are made at the end of an accounting period in order to ensure that the financial statements accurately reflect the economic realities of the business.
In particular, adjusting entries are used to correct any errors or discrepancies in the accounts, and to bring the accounts up to date by recognizing revenue, expenses, and other events that have occurred but have not yet been recorded in the accounts. This is important because it allows the financial statements to provide a complete and accurate picture of the business's financial health and performance.
For example, if a business has earned revenue but has not yet recorded it in the accounts, an adjusting entry would be made to recognize that revenue and to increase the asset balance for the business. Similarly, if a business has incurred expenses but has not yet recorded them in the accounts, an adjusting entry would be made to recognize those expenses and to decrease the asset balance for the business. Overall, adjusting entries are a crucial part of the accounting process, and they help to ensure that the financial statements provide a complete and accurate picture of the business's financial position.