Required information LO 04-06 Explain how adjustments affect financial results. [The following information applies to the questions displayed below.) In this module, you will learn that adjustments help ensure all revenues and expenses are reported in the period in which they are learned and incurred, as a result of a company's activities. Without these adjustments, the financial statements present an incomplete and potentially misleading picture of the company's financial performance. Adjusted Financial Results Adjusted Financial Results Adjustments Without adjustments, financial statements would be incomplete and misleading Income Statement Balance Sheet Revenues reported when generate Assets Wh the company owns Expenses reported when incurred Liabilities: What the company owes Knowledge Check 01 How do adjustments affect financial results? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Net Income will be lower once the adjustment process is complete. All revenues and expenses will be reported in the period in which they are generated and incurred. ? Adjustments result in an incomplete and misleading picture of the company's financial performance. 2 The financial statements will present the best picture of whether the company's business activities were profitable that period and what economic resources the company owns and owes at the end of that period