Question

Adjusted closing entry affects _______________.

• A. Trading A/c
• B. P/L A/c
• C. Balance Sheet
• D. All of the above.

Answer 1

Answer: (C)

Balance Sheet

Adjusting entries are journal entries recorded at the end of an accounting period to adjust income and expenses accounts so that they comply with the actual concept of accounting. Their main purpose is to match income and expenses to appropriate accounting periods. Adjusting closing entry affects Balance Sheet.