Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Summary of Adjusting Entries

Financial Accounting

3. Accrual Accounting Concepts

Summary of Adjusting Entries

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Multiple Choice

The main purpose of adjusting entries is to:

record transactions as they occur during the period

ensure that revenues and expenses are recorded in the correct accounting period

close temporary accounts to retained earnings

prepare the financial statements for the next accounting period

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Verified step by step guidance

Understand the concept of adjusting entries: Adjusting entries are made at the end of an accounting period to ensure that the financial statements reflect the correct revenues and expenses for that period.

Recognize the purpose of adjusting entries: Their primary purpose is to ensure that revenues and expenses are recorded in the correct accounting period, adhering to the accrual basis of accounting.

Differentiate adjusting entries from other accounting processes: Adjusting entries are not used to record transactions as they occur during the period, nor are they used to close temporary accounts to retained earnings. These are separate processes in accounting.

Connect adjusting entries to financial statement preparation: Adjusting entries help prepare accurate financial statements by aligning the accounts with the correct period's activity.

Conclude the purpose: The main purpose of adjusting entries is to ensure that revenues and expenses are recorded in the correct accounting period, which is essential for accurate financial reporting.