Accrual Accounting, Adjusting Entries & the Accounting Cycle

During the week, we will explore the differences between cash-basis and accrual-basis accounting, and learn the steps required to complete the accounting cycle. With that in mind, let’s begin by discussing the following question:
Why do companies make adjusting entries? When are adjusting entries made and at what point in the accounting process? How is the accrual basis of accounting different from the cash basis?
Book for references
Financial Accounting: Tools for Business Decision Making 9th Kimmel, Weygandt and Kieso
2019 Wiley

Sample Solution