Why are adjusting entries typically prepared by accountants?

Adjusting entries are crucial for ensuring compliance with accounting standards, particularly the accrual basis of accounting. This basis requires that revenues and expenses be recognized when they are incurred, regardless of when cash transactions occur. By preparing these entries, accountants align the financial statements with these standards, ensuring that they accurately reflect the financial position and performance of the entity for a given period.

This process includes recognizing accrued revenues that have been earned but not yet received, and expenses that have been incurred but not yet paid. Adjusting entries also involve deferrals, which ensure that cash transactions are matched to the period in which they actually apply. Overall, the primary goal of these entries is to present a true and fair view of the financial statements in accordance with Generally Accepted Accounting Principles (GAAP) or other relevant standards, thus maintaining the integrity of financial reporting.

While simplifying the financial reporting process, increasing revenues, or delaying the accounting period closing might seem beneficial in different contexts, they do not address the fundamental purpose of adjusting entries, which is to ensure that financial information is accurately and consistently reported in compliance with accounting standards.