Which of the following statements is correct? A) Adjusting entries are used to record both accrued expenses and accrued revenues B) Accrued expenses and accrued revenues involve assets and liabilities that have not yet been recorded. C) Prepaid expenses, depreciation, and unearned revenues require adjusting entries to record the effects of the passage of time. D) Prepaid expenses, depreciation, and unearned revenues involve previously recorded assets and liabilities. E) All of these

E) All of these

Explanation:

Adjusting journal entry are entries in a general ledger of a company that occurs at the end of an accounting period to record any unrecognized income or expenses for that period. Transaction that is started in one accounting period but ended in a later period, requires an adjusting journal entry to properly account for the transaction. Adjusting journal entries can also refer to financial reporting which corrects a mistake made previously in an accounting period.

The following statements are true and correct about Adjusting entries

• Adjusting entries are used to record both accrued expenses and accrued revenues

• Accrued expenses and accrued revenues involve assets and liabilities that have not yet been recorded.

• Prepaid expenses, depreciation, and unearned revenues require adjusting entries to record the effects of the passage of time.

• Prepaid expenses, depreciation, and unearned revenues involve previously recorded assets and liabilities.