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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Exercise 4-4 Appendix F contains the Farmers' ledger accounts after posting the adjusting journal entries in Chapter 4.
(b) Prepare any necessary adjusting journal entries and determine the effect of each entry on net income (record in a format similar to the following example).
As Figure 5-1 indicates, you can prepare an accrual-adjusted income statement after recording and posting adjusting journal entries. Or, you can first prepare a cash-basis income statement and then add the adjustments.
Three examples illustrate the determination of the accounts, amounts, and direction of change in the adjusting journal entries for deferred income taxes.
The ledger below shows the content of each of the accounts used by the Farmers in the journal entries discussed in Chapter 3 and the adjusting journal entries from Chapter 4, that is, journal entries (1) through (46), except entry (36).
10, Performance of Review Engagements, concerning fraud and a representation addressing the client's acceptance of any proposed adjusting journal entries.
Coopers' audit program did have a step to obtain selected nonstandard adjusting journal entries so that any large and unusual items could be further examined.
Adjusting journal entries: Journal entries in which adjustments are recorded.