Question

Which statement about adjusting entries is false? Adjusting entries are recorded in the general journal but...

Which statement about adjusting entries is false?

Adjusting entries are recorded in the general journal but are not posted to the accounts in the general ledger.

An adjusting entry would adjust a revenue transaction so it is reported when the revenue is earned.

Before an adjusting entry for prepaid expense is recorded, assets will be overstated and expenses will be understated.

Adjusting entries are often made because some business events are not recorded as they occur.
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Answer #1

Answer:

Adjusting entries are recorded in the general journal but are not posted to the accounts in the general ledger

Explanation:

i. Adjusting entries are recorded in the general journal but are not posted to the accounts in the general ledger:

  • False because adjusting entries should be posted to the accounts in the general ledger

ii. An adjusting entry would adjust a revenue transaction so it is reported when the revenue is earned:

  • True

iii. Before an adjusting entry for prepaid expense is recorded, assets will be overstated and expenses will be understated:

  • True

iv. Adjusting entries are often made because some business events are not recorded as they occur:

  • True

Thus, Option i is correct and remaining options are incorrect.

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