Adjusting Entry


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Adjusting Entry

1. An adjustment made to a company's financial records at the end of an accounting period to assign revenues and expenses to the days on which the events justifying them occurred or on which the revenue was received, depending on the situation. For example, if a company is paid in advance for the purchase of some good, an adjusting entry may recognize that revenue on the day the good was delivered. Likewise, if the company was paid after delivery, it may recognize the revenue on the day it was paid. See also: Accrued Expenses, Accrued Revenue, Prepaid Expenses, Unearned Revenue.

2. Any correction to a previous entry in a company's financial records.
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References in periodicals archive ?
An adjusting entry is made at year end for 1998 to adjust the futures contracts to fair value based on the closing price for that date.
We adjusted cost of service down by $194,000 to reflect the correction of an adjusting entry in cost of service from one of our international subsidiaries.
Alternatively, if his accountant had recorded the $10,000 as dividend income, the following adjusting entry would be required: