« previous next »

Author Question: Why are adjusting entries necessary to portray a more accurate picture of a company's financial ... (Read 40 times)

Mr. Wonderful

  • Hero Member
  • *****
  • Posts: 866
on: Jul 6, 2018
Why are adjusting entries necessary to portray a more accurate picture of a company's financial position?

Question 2

What information would not be found in a firm's annual report?
 
  a. Notes to the financial statements.
  b. Financial Reporting Rulings.
  c. Auditor's report.
  d. High and low stock prices.


chjcharjto14

  • Sr. Member
  • ****
  • Posts: 342
Reply #1 on: Jul 6, 2018
Answer to Question 1

Adjusting entries represent the recording of internal transactions in that outside parties are not involved. Without adjusting entries, certain assets (such as Prepaid Insurance, Supplies, and the book values of Building and Equipment) may be overstated. Also, certain liabilities (such as Wages Payable) may be understated. If expenses are incorrectly portrayed, then net income is understated or overstated. Consequently, the balance of the owner's Capital account will not be correct either.

Answer to Question 2

b


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question

Mr. Wonderful

  • Hero Member
  • *****
  • Posts: 866
Reply #2 on: Jul 6, 2018
Thank you :)


chjcharjto14

  • Sr. Member
  • ****
  • Posts: 342
Reply #3 on: Jul 6, 2018
Happy to help you


« previous next »
 

Did you know?

To maintain good kidney function, you should drink at least 3 quarts of water daily. Water dilutes urine and helps prevent concentrations of salts and minerals that can lead to kidney stone formation. Chronic dehydration is a major contributor to the development of kidney stones.

Did you know?

It is believed that humans initially contracted crabs from gorillas about 3 million years ago from either sleeping in gorilla nests or eating the apes.

Did you know?

In most climates, 8 to 10 glasses of water per day is recommended for adults. The best indicator for adequate fluid intake is frequent, clear urination.

Did you know?

There are more sensory neurons in the tongue than in any other part of the body.

Did you know?

Famous people who died from poisoning or drug overdose include, Adolf Hitler, Socrates, Juan Ponce de Leon, Marilyn Monroe, Judy Garland, and John Belushi.

Illusionary picture of teacher’s head exploding Illusionary picture of teacher’s head exploding
Before starting the process of adjusting the valves, look up the specifications and exact ... Before starting the process of adjusting the valves, look up the specifications and exact ...
Molecular Genetics DNA picture matching question Molecular Genetics DNA picture matching question
Helgeson Company has identified the following items for possible inclusion when taking a ... Helgeson Company has identified the following items for possible inclusion when taking a ...
A company that makes cell phones has the following cost structure. They have fixed costs of ... A company that makes cell phones has the following cost structure. They have fixed costs of ...
Jia's Fashions recently paid a $2 annual dividend. The company is projecting that its ... Jia's Fashions recently paid a $2 annual dividend. The company is projecting that its ...
Video: Stomach peristalsis - Movement of Food Through the Small Intestine

For a complete list of videos, visit our video library