What will generally happen if a company's adjusting entries are not complete?

When adjusting entries are not complete, it is highly likely that account balances will be misrepresented. Adjusting entries are crucial for accurately aligning revenues and expenses with the appropriate accounting period, following the accrual basis of accounting. If these entries are overlooked or improperly performed, the financial statements may not reflect the true financial position and results of operations of the company.

For instance, if expenses incurred during an accounting period are not recognized, the financial statements will show inflated profits since the expenses that should be deducted from revenues will be absent. Similarly, if revenues earned but not recorded are omitted, this will understate the company's financial performance for that period.

Therefore, without proper adjusting entries, misleading or inaccurate financial information will be presented, affecting decision-making by management, investors, and other stakeholders. This underscores the importance of completing adjusting entries to ensure that the financial reports accurately reflect the company's financial status.