Why is it necessary to record the adjusting entries in the preparation of final accounts?

Explanation

Entries that square measure given outside the balance square measure known as adjustment entries, to record those entries a correct treatment is needed consistent with the double-entry bookkeeping system. Here it's to be remembered that each one the changes given outside the 'Trial Balance' square measure denote at 2 places. Adjustment is mostly in deep trouble those things that square measure omitted or entered with the incorrect quantity and/or recorded beneath wrong heads. the subsequent square measure reasons for recording or incorporating these adjustment entries in preparation of ultimate account.

(i) Through these adjustment entries we tend to return to understand the particular figure of profit or loss.

(ii) owing to these adjusting entries, we are able to assess verity monetary position of associate organisation supported the accounting system of accounting
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(iii) These adjustment entries change US to records the omitted entries and facilitate in rectifying all those errors.

(iv) These adjusting entries facilitate in providing depreciation and creating totally different provisions, like dangerous Debts and Depreciation.