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    This post addresses adjusting and closing entries.

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    Explain the purpose of adjusting entries. How is net income affected if adjusting entries are not made? Describe the four closing entries and explain their purpose.

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    The purpose of adjusting entries is to adjust all necessary accounts to their current end of period amounts. In the adjusting entries, management adjusts all necessary expenses. The adjusting entries bring the account balances to the proper amounts. For example, if $500 worth of supplies have been used during the period, management will make an adjusting entry for the $500, which makes the $500 an expense to supplies. If the adjusting entry was not completed, our supplies ...

    Solution Summary

    The solution thoroughly discusses the purpose of adjusting entries, how net income is affected, and the four closing and their purpose.