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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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(Appendix 6. 7) Why are adjusting entries made after the bank reconciliation is completed? Give an example of an item on a bank reconciliation that requires an adjusting entry.

To determine

State the reason for which the adjusting entries are recorded after the bank reconciliation is completed, provide an example of an item on a bank reconciliation that needs an adjusting entry.

Explanation

Adjustment entries:

Adjusting entries are those entries which are made at the end of the year to update all the balances in the financial statements to show the true financial information and to maintain the records according to accrual basis principle.

  • Adjusting entries are made after preparing the bank reconciliation in order to bring the company records up to date...

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