A more thorough explanation:

An adjusting entry is a type of accounting entry that is made at the end of an accounting period to record previously unrecognized revenue and expenses, as well as changes in assets and liabilities. These entries are necessary to ensure that financial statements accurately reflect the financial position of a company.

For example, a company may have received payment for services that will be provided in the next accounting period. In this case, an adjusting entry would be made to record the revenue in the current period, even though the services have not yet been provided.

Another example of an adjusting entry is the recognition of depreciation expense on fixed assets. Depreciation is the process of allocating the cost of a fixed asset over its useful life. An adjusting entry is made at the end of each accounting period to record the portion of the asset's cost that has been used up during that period.

Overall, adjusting entries are important because they ensure that financial statements accurately reflect a company's financial position. Without these entries, financial statements would not provide a complete and accurate picture of a company's financial health.