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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Learning Objective 9 * To post adjusting journal entries.
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).
One perspective continues from Chapter 4, which illustrated the recording and posting of adjusting journal entries and concluded with an adjusted trial balance.
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.
Suddenly, there were computers, afFordable to most firms, that allowed the accountant to enter a preliminary trial balance and post transactions and adjusting journal entries.
The BusinessVision Accountants Copy also allows accountants to post adjusting journal entries with no interruption to the client's business.
Adjusted trial balance: Trial balance that includes adjusting journal entries.
We also request copies of prior-year financial statements and all adjusting journal entries so we can assess its internal accounting capabilities," he says.