1. Why are adjusting entries recorded at the end of the accounting period?

a. Unrecorded accruals and deferrals must be recognized before the financial statements can be prepared.

b. The Cash account must be adjusted for the effects of the daily transactions with customers and creditors.

c. The companys accounts must be adjusted to ensure that debits are equal to credits prior to preparing the trial balance.

d. The data from the temporary accounts (revenues, expenses, and dividends) must be moved into the retained earnings account.

2. Which one of the following would not be included in a closing entry?

1. A credit to Dividends
2. A credit to Rent Expense
3. A debit to Unearned Revenue
4. A debit to Service Revenue