Please help!

What is the purpose of the adjusting entry for prepaid expenses?

To transfer a portion of the prepaid expense from the balance sheet to the income statement to match it with the period in

which it was incurred.

To decrease the value of the prepaid expense on the income statement.

To increase the value of the prepaid expense on the balance sheet.

To record the initial payment for the prepaid expense.

Which of these are typical month end activities performed by the bookkeeper?

Adjusting Entries

Prepare month end reports such as income statement and balance sheet.

Complete a bank reconciliation.

All of the above.

Can someone please help!

Why are adjusting entries necessary?

To avoid tax payments by delaying the recognition of revenue.

To ensure that revenues and expenses are properly recognized in the right accounting period, abiding by the matching

principle.

To manipulate financial statements to show higher profits.

To increase the value of assets on the balance sheet.