The purpose of adjusting entries is to transfer net income and dividends to Retained Earnings. False

A deferral adjustment may involve one asset and one expense account. True

As a company uses supplies, an adjustment should be made to decrease an asset account and increase an expense account. True

A contra account is added to the account it offsets. False

Adjusting entries often involve cash False

Which of the following statements about the need for adjustments is not correct? Adjusting entries are intended to change the operating results to reflect management's objectives for operating performance.

One of the major advantages of making adjustments in order to improve the quality of financial statements is that they ensure that revenues and expenses are recognized during the period they are earned and incurred.

Adjusting entries are typically prepared: at the end of the accounting period.

If certain assets are partially used up during the accounting period, then an asset account is decreased and an expense is recorded.

When existing assets are used up in the ordinary course of business an expense is recorded

An example of an account that could be included in an accrual adjustment for revenue is Unearned Revenue

A company owes rent at a rate of $6,000 per month. The company pays the rent owed on the tenth of each month for the previous month. At the end of each month, what kind of adjustment is required? An accrual adjustment

If an expense has been incurred but will be paid later, then a liability account is created or increased and an expense is recorded.

Adjusting entries affect both income statement and balance sheet accounts.

At the end of the month, the adjusting journal entry to record the use of supplies would include a debit to: Supplies Expense and a credit to Supplies.