Every time a company prepares financial statements, adjusting entries are required. Generally, financial statements are prepared...

Every time a company prepares financial statements, adjusting entries are required. Generally, financial statements are prepared at the end of each month, the end of each quarter and at the end of each year.

Each adjusting entry affects a balance sheet account and an income statement account. For example, Adjusting Entries for Prepaid Assets or Fixed Assets involve decreasing the asset account and increasing the expense account. Adjusting entries are made in order properly follow GAAP.

Based on your review of Section 1 of Chapter 5, describe an adjusting journal entry that is needed at the end of an accounting period.
Why are adjusting entries important and how do they contribute to accurate financial reporting?
Accrual accounting is required under U.S. GAAP. One of the main principles of accrual accounting is the Matching Principle, also known as the Revenue Recognition Principle and the Expense Recognition Principle. Consult are liable resource online and in your own words, explain the difference between accrual basis accounting and cash basis accounting. How does this relate to the Matching Principle?

Expert Solution

The adjusting entry as per US Gaap will be passed at the end of the accouting period. The description is as follows:

ekkarill92 answered 11 months ago

Adjusting entries are made to balance sheet accounts only. usually required before financial statements are prepared....

Adjusting entries are made to balance sheet accounts only. usually required before financial statements are prepared. made whenever management desires to change an account balance. not necessary if the accounting system is operating properly.

Why is it required that financial statements are prepared under Generally Accepted Accounting Principles?

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