Essay
Pierce Company was founded in Year 1 and engaged in the following transactions:Issued common stock for cashPaid rent in advance for 3 months at a timePurchased supplies on accountCollected cash from a customer for services to be provided over a period of 1 yearPaid a cash dividend to stockholdersPurchased a 2-year fire insurance policyProvided services to customers on accountCollected cash from accounts receivablePaid cash for various operating expensesRequired:Which of the above transactions would require adjusting entries at year end?Why are adjusting entries required before financial statements can be prepared?
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