Which of the following is an adjusting entry?

• A. Correcting a misposted amount.
• B. Recording a cash receipt from a customer.
• C. Paying a supplier.
• D. Recording depreciation expense.

Answer: (A)

Adjusting entries are made at the end of a period to ensure accounts reflect accrual-basis results and to fix items that weren’t properly captured during ordinary posting. Correcting a misposted amount fits this idea because it fixes an error in the ledger that would otherwise misstate revenue, expenses, assets, or liabilities on the financial statements. This kind of entry brings balances to the correct figures before financial statements are prepared.

Recording a cash receipt from a customer and paying a supplier are routine transactions recorded when they occur, not end-of-period adjustments. Recording depreciation expense is typically handled as an adjusting entry as part of allocating asset costs over time, but the example that best illustrates an adjusting-entry concept in this context is correcting a misposted amount.