What is the purpose of adjusting entries in accounting?

The purpose behind adjusting entries in accounting is to ensure that all accounts conform with the accrual concept. According to the accrual concept, at the end of an accounting period, all income and expenses must be updated in order for the books to balance, according to Accounting Verse.

Accounting Verse explains that the accrual concept covers the idea that income should be accounted for as soon as it is earned, and expenses should be recorded in the same period that they occur. This keeps a running, accurate update of the businesses' process and allows managers to make decisions based on current information.