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Question

The preparation of adjusting entries is an application of the concept of accounting.


A
money measurement
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B
business entity
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C
accrual
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D
going concern
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Solution

The correct option is C accrual
The preparation of adjusting entries is an application of the accrual concept of accounting. According to accrual concept, revenues and costs are accrued, that is, recognised as they are earned or incurred (and not as money received or paid) and recorded in the financial statements of the periods to which they relate.

Accountancy

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