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Why are adjustments in the profit and loss account necessary?

Why are adjustments in the profit and loss account necessary?
Take Free Practice Test On 2026 JAMB UTME, Post UTME, WAEC SSCE, GCE, NECO SSCE
  • A To cover some expenses of the following year
  • B To show the provisions made during the year
  • C To show the total expenses paid and income received during the year
  • D To ascertain the actual expenses incurred and income earned during the year
Correct Answer: Option D
Explanation:
Fundamental principle of preparing P&L account is that expenses and income relating to only the trading period are taken to the trading profit and loss account.

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