When a company has earned interest in the current period but has not yet recorded the interest, what type of adjustment is the company required to make?

Question

Business

Gerald

13 July, 15:47

When a company has earned interest in the current period but has not yet recorded the interest, what type of adjustment is the company required to make?

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Answers (1)

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Joanna · Answer 1

The correct answer is : make an adjusting entry

Explanation:

This process has to be done at the end of the current period to accrue the interest earned. It is a journal entry that is recorded at the end of a reporting period that can alter the number of expenses that are set in the income statement. It updates certain revenue to make sure you comply with the matching principle.