Asked by CHELSEY MYERS on May 01, 2024
Verified
By ignoring and not posting the adjusting journal entries to the appropriate accounts, net income will always be overstated.
Adjusting Journal Entries
Entries in accounting made during the close of a financial period, aiming to accurately allocate profits and expenditures to their respective periods of occurrence.
Net Income
A company's overall earnings following the deduction of all expenses and taxes from its total revenue.
- Explain the impact of accurate and inaccurate adjustments on the precision and thoroughness of financial reports.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
False
Explanation :
Adjusting journal entries can either increase or decrease net income depending on the nature of the adjustments (e.g., recognizing unrecorded expenses would decrease net income, while recognizing unrecorded revenues would increase it).
Learning Objectives
- Explain the impact of accurate and inaccurate adjustments on the precision and thoroughness of financial reports.