Question

Which of the following items would require an adjusting entry at the end of each accounting period? a.Vacation pay earned by employees b.Garnishment for child support payments c.Union dues withheld d.Withholdings for a 401(k) plan e.None of these choices are correct.

Answer 1

Answer: a.Vacation pay earned by employees

Explanation: Adjusting entries refers to journal entry made to ensure that some financial activity is assigned to the posting period in which the activity occurred. Their main purpose is to match incomes and expenses to appropriate accounting periods. They are made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.