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Question# 2 (20 Marks) a) Why do Companies prepare Adjusting Journal Entries? What is the impact on the Financial Statements, if they are NOT prepared?

Question# 2 (20 Marks)

a) Why do Companies prepare Adjusting Journal Entries? What is the impact on the Financial Statements, if they are NOT prepared?

b) What Accounting Principle/Concept is the root cause for the above step in the Monthly Process?

c) Why do Companies prepare Closing Entries? ( Identify 2 reasons)

d) Whats the Difference between an Unadjusted Trial Balance ...and an Adjusted Trial Balance?

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