1. Genreally, adjusting entries do NOT consist of:

A debit to an expense and a credit to an asset.

A debit to an expense and a credit to revenue.

A debit to an expense and a credit to a liability.

A debit to a liability and a credit to revenue.

2. The purpose of adjusting entries is to:

Bring the revenue, expense, asset, and liability account balances into alignment with the rules ot cash basis accounting

Bring the revenue, expense, asset, and liability account balances into alignment with the rules ot accrual basis accounting

Correct errors made during the accounting period.

Update the Retained Earnings account for the changes in retained earnings that had been recorded in revenue and expense accounts throughout the period.

3. The adjusting entry to record corporate income taxes accrued during a profitable period:

		Is made when the income tax return is filed.
		Is often omitted because this expense is relatively insignificant compared to most other business expenses.
		Reduces net income, but has no immediate effect on the corporation's assets.
		Includes a credit to the Cash account.