Certified Medical Administrative Assistants (CMAA) Practice Exam

An adjustment in a financial statement refers to any change made to the figures presented, typically to clarify or improve the accuracy of the financial information. An uncollected amount is considered an adjustment because it reflects money that was expected to be received but has not yet been collected, affecting the accounts receivable and ultimately the revenue shown in the financial statement.

This adjustment is essential for providing a realistic view of the company's finances, as it highlights potential revenue shortages or the need for further action to collect these amounts. Adjustments like these ensure that the financial statements present an accurate and fair representation of the organization's financial status, adhering to principles such as consistency and prudence in financial reporting.

In contrast, a new investment represents the introduction of new funds into the company and affects the capital structure but doesn't necessitate an adjustment to existing figures. A payment received indicates cash inflow but does not involve adjusting previous amounts—rather, it reflects a transaction that has already been completed. Shareholder dividends represent distributions of profits, and while they affect retained earnings, they are not adjustments in the same context as uncollected amounts, as they deal more with the allocation of profits rather than the accuracy of revenue figures.