Adjusting entries are required

A) because some costs expire with the passage of time but have not yet been recorded.
B) when the company's net income is below budget.
C) when expenses are recorded in the period in which they are incurred.
D) when revenues are recorded in the period in which they are earned.

Adjusting Entries

Recordings at the period's end in accounting to accurately assign earnings and costs to the time they happened.

Costs Expire

The concept that certain costs represent the consumption of assets over time or through use and are thus recorded as expenses.

Net Income

The total profit or loss of a business after all expenses, taxes, and costs have been deducted from total revenue.