What are adjusting entries? Why are they necessary for preparing final accounts?

Explanation

Adjusting entries ar the entries of these changes that ar given outside the balance and that facilitate USA replicate truth money position i.e., profit or loss of AN organisation. in line with the double-entry system, all the changes given outside the balance ar denote at 2 places. The adjusting entries ar necessary they permit USA to post and take into consideration those things that ar omitted or entered with the incorrect quantity and/or recorded underneath wrong heads.


The treatment of adjusting entries is critical.

(i) It helps USA assess truth money position of AN organisation supported accounting of accounting.

(ii) It helps USA recognize the particular figure of profit or loss.

(iii) It records the omitted entries and rectifies the errors created.

(iv) It helps in providing depreciation and creating completely different provisions, like unhealthy Debts and depreciation.