An example of an adjusting entry is: O the accruing of interest expense o the payment of wages that have been accrued o the return of defective inventory O the payment of rent in advance O collection of an accounts receivable QUESTION 38 Which of the following statements regarding adjusting entries is true? O Adjusting entries are made at periodic intervals, usually when the financial statements are about to be prepared. O Adjusting entries have nothing to do with accrual accounting. O Adjusting entries are made on a daily basis as cash is exchanged between parties. The recording of cash receipts from customers is an example of an adjusting entry. O Accountants use adjusting entries to record explicit transactions at the end of each reporting period. QUESTION 39 Which of the following accounts is not a liability on the balance sheet? Retained earnings. Interest payable Accounts payable. Notes payable