Asked by Cassandra Barrios on Jun 26, 2024
Verified
Under the accrual basis of accounting, adjustments are often made for prepaid expenses and unearned revenues.
Accounting
The systematic process of recording, measuring, and communicating financial information about economic entities.
- Learn the purpose and underpinnings of adjusting entries in accounting operations.
- Acquire insight into the nature of prepaid, unearned, and accrued components within accounting practices.
Verified Answer
SQ
Salma QureshiJul 01, 2024
Final Answer :
True
Explanation :
Under the accrual basis of accounting, adjustments are made for prepaid expenses (expenses paid in advance but not yet incurred) and unearned revenues (revenues received in advance but not yet earned). This is done to match expenses with the revenues they generate, and to ensure that financial statements accurately reflect the company's financial position and performance.
Learning Objectives
- Learn the purpose and underpinnings of adjusting entries in accounting operations.
- Acquire insight into the nature of prepaid, unearned, and accrued components within accounting practices.
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