How frequently are adjusting entries typically made?

Adjusting entries are an essential part of the accounting cycle, and they are typically made at the end of each accounting period. This timing is crucial because it ensures that all revenues and expenses are recognized in the period in which they occur, in accordance with the accrual basis of accounting. This method allows for a more accurate representation of a company's financial position and performance, as it matches income earned with the expenses incurred to generate that income.

By making these entries at the end of each accounting period, businesses can ensure that their financial statements reflect all necessary adjustments for items such as unearned revenue, accrued expenses, and prepaid expenses. This practice ultimately leads to more reliable financial reporting, which stakeholders can depend on for decision-making.

While adjusting entries can also be made when financial statements are prepared, this is often seen as a broader practice encapsulating various adjustments that might be needed based on reporting cycles, rather than a specific routine occurrence. Therefore, the most accurate answer regarding the frequency of making adjusting entries is specifically at the end of each accounting period.