MANAGEMENT

Detailed explanation-1: -The given statement is false. In the accounting cycle, adjusting entries are prepared before closing entries. Adjusting entries means those entries that record the accrual of revenue and expenses, prepaid expenses, accrual of interest till the end of the reporting period, creation of provisions, etc.

Detailed explanation-2: -First, adjusting entries are recorded at the end of each month, while closing entries are recorded at the end of the fiscal year. And second, adjusting entries modify accounts to bring them into compliance with an accounting framework, while closing balances clear out temporary accounts entirely.

Detailed explanation-3: -Adjusting entries are made at the end of an accounting period to properly account for income and expenses not yet recorded in your general ledger, and should be completed prior to closing the accounting period.

Detailed explanation-4: -The purpose of adjusting entries is to convert cash transactions into the accrual accounting method. Accrual accounting is based on the revenue recognition principle that seeks to recognize revenue in the period in which it was earned, rather than the period in which cash is received.

Detailed explanation-5: -Adjusting entries are necessary to update all account balances before financial statements can be prepared. These adjustments are not the result of physical events or transactions but are rather caused by the passage of time or small changes in account balances.