What are adjusting entries primarily used for?

Adjusting entries are primarily used to ensure that a company's financial statements reflect the accurate financial position and performance for a given accounting period. They facilitate the necessary updates to account balances so that all revenues and expenses are recognized in the period in which they occur, which is in accordance with the accrual basis of accounting.

The use of adjusting entries typically focuses on capturing transactions that may not have been documented during the accounting period but still should affect the financial statements to present a true and fair view. Such transactions might not have been captured due to timing issues, such as unpaid expenses or earned revenues that haven't yet been invoiced.

While correcting errors and transferring income between periods are important aspects of financial accounting, they do not predominantly define the purpose of adjusting entries. Similarly, closing the books at the end of the fiscal year involves a different set of entries and is not the primary function of adjusting entries during the accounting cycle.