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Adjusting entries affect balance sheet accounts to the exclusion of income statement accounts.
Adjusting Entries
Bookkeeping entries executed at the termination of a financial period for the purpose of apportioning earnings and expenses to the actual period they took place.
Balance Sheet Accounts
Accounts appearing on the balance sheet, representing a company's assets, liabilities, and equity at a specific point in time.
Income Statement Accounts
Accounts that reflect income, expenses, gains, and losses, which are used to determine the net income of a business.
- Explain the role of adjusting entries in affecting financial statement accounts.
- Understand the implications of adjusting entries on asset and liability accounts.
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Learning Objectives
- Explain the role of adjusting entries in affecting financial statement accounts.
- Understand the implications of adjusting entries on asset and liability accounts.
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