Principles of Accounting 5
Tutorial Test 3
Group 3
i) Adjusting entries:
a) Nature:
● Adjusting entries are recorded at the end of the accounting period but
before the annual financial statements are prepared to ensure that
account balances are up to date and that therefore the financial
statements are the most accurate.
● Uses accrual basis accounting
● In accordance with GAAP
b) Purpose:
Some business transactions affects revenues and expenses more than one
