Intermediate Accounting (16th Edition)

Published by Wiley
ISBN 10: 1118743202
ISBN 13: 978-1-11874-320-1

Chapter 3 - The Accounting Information System - Review and Practice - Questions - Page 127: 11


Before financial statements are prepared, adjusting entries are prepared to update the accounts.

Work Step by Step

They are necessary because they help in matching expenses to their affiliated incomes when measuring income. They also help in increasing the level of accuracy when presenting stockholders equity, assets, as well as liabilities.
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