Asked by Manmeet Sanger on Apr 29, 2024
Verified
An adjusting entry would adjust revenue so it is reported when earned and not when cash is received.
Adjust Revenue
The act of modifying the reported amount of revenue to more accurately reflect the earnings of a period, following certain accounting principles and standards.
Reported
Refers to information or data that has been officially announced or presented.
- Recognize the principles of revenue recognition and the matching principle as foundations of accrual accounting.
- Familiarize oneself with the objectives of adjusting entries and their contribution to the accounting cycle.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
True
Explanation :
Adjusting entries are made to ensure that the financial statements accurately reflect the company's financial position and performance. One type of adjusting entry is to recognize revenue when it is earned, not just when cash is received. This is in accordance with the accrual basis of accounting, which requires revenue to be recognized when it is earned, regardless of when cash is received.
Learning Objectives
- Recognize the principles of revenue recognition and the matching principle as foundations of accrual accounting.
- Familiarize oneself with the objectives of adjusting entries and their contribution to the accounting cycle.
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