Question

In: Accounting

Explain the purpose of adjusting entries at the end of a period.

Explain the purpose of adjusting entries at the end of a period.

Solutions

Expert Solution

Adjusting entries are made toward the finish of the year to refresh the balance in the account to their present balance.

The primary reason for adjusting entries is to refresh the accounts to accommodate with the accrual idea. Toward the finish of the accounting period, some income and expenses may have not been recorded, taken up or refreshed; subsequently, there is a need to refresh the accounts.

On the off chance that adjusting entries are not prepared, some income, cost, asset, and liability accounts may not mirror their actual qualities when detailed in the financial statements. Therefore, adjusting entries are fundamental.

For the most part, there are 4 kinds of adjusting entries. Adjusting entries are prepared for the accompanying:

Collected Income – income earned however not yet got

Collected Expense – expenses caused yet not yet paid

Deferred Income – income got yet not yet earned

Prepaid Expense – expenses paid yet not yet caused

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Explain why adjusting journal entries are required at the end of the accounting period? (3 marks)...
Explain why adjusting journal entries are required at the end of the accounting period? Explain how a firm’s net cash position in the Cashflow Statement can decrease during a year when the profit has increased. Give an example.   (2marks) In accounting for inventories and cost of goods sold, why are cost flow assumptions such as FIFO and LIFO needed? Why not just use the specific identification method? Explain the impact on the Income Statement of using the LIFO inventory valuation...
In your own words... Explain the purpose and timing of “adjusting journal entries”. Explain the purpose...
In your own words... Explain the purpose and timing of “adjusting journal entries”. Explain the purpose and timing of ‘closing journal entries”. Explain each section of the classified balance sheet . Explain the “current ratio” and the “debt to equity ratio”. Explain the purpose of internal controls. Identify and explain 5 common internal controls that are used in business. Explain the purpose and timing of the process of bank reconciliation.
Errors and Adjusting Entries Use the following information to record necessary end of period journal entries:
  Errors and Adjusting Entries Use the following information to record necessary end of period journal entries: A man came into Cutting Edge on 31 March 2020 to pay for repairs to his mower which he will bring in later. He paid $2,500 cash. The mower was arranged to be delivered to Cutting Edge on 10 April, 2020.  Repair services of $6,250 were provided on 31 March 2020 but have not yet been recorded in the transactions. Payment has...
X Company's accountant made adjusting entries at the end of the period for the following reasons:...
X Company's accountant made adjusting entries at the end of the period for the following reasons: $2,862 of unpaid interest on a bank loan $507 of wages that were earned by employees but not paid $1,380 of insurance that expired What was the effect of these entries on total equities?
X Company's accountant made adjusting entries at the end of the period for the following reasons:...
X Company's accountant made adjusting entries at the end of the period for the following reasons: $1,059 of unpaid interest on a bank loan $553 of wages that were earned by employees but not paid $1,380 of insurance that expired What was the effect of these entries on total assets?
X Company's accountant made adjusting entries at the end of the period for the following reasons:...
X Company's accountant made adjusting entries at the end of the period for the following reasons: $2,443 of unpaid interest on a bank loan $564 of wages that were earned by employees but not paid $1,490 of insurance that expired What was the effect of these entries on total equities?
Course Contents » X Company's accountant made adjusting entries at the end of the period for...
Course Contents » X Company's accountant made adjusting entries at the end of the period for the following reasons: $1,059 of unpaid interest on a bank loan $553 of wages that were earned by employees but not paid $1,380 of insurance that expired What was the effect of these entries on total assets?
What is the purpose of making adjusting entries? Your answer should relate adjusting entries to the...
What is the purpose of making adjusting entries? Your answer should relate adjusting entries to the goals of accrual accounting. Do adjusting entries affect income statement accounts, balance sheet accounts, or both? Explain.
Ledger Accounts, Adjusting Entries, Financial Statements, and Closing Entries; End-of-Period Spreadsheet. The unadjusted trial balance of...
Ledger Accounts, Adjusting Entries, Financial Statements, and Closing Entries; End-of-Period Spreadsheet. The unadjusted trial balance of Recessive Interiors at January 31, 2018, the end of the year, follows: Recessive Interiors Unadjusted Trial Balance January 31, 2018 Debit Balances Credit Balances 11 Cash 13,100 13 Supplies 8,000 14 Prepaid Insurance 7,500 16 Equipment 113,000 17 Accumulated Depreciation—Equipment 12,000 18 Trucks 90,000 19 Accumulated Depreciation—Trucks 27,100 21 Accounts Payable 4,500 31 Common Stock 30,000 32 Retained Earnings 96,400 33 Dividends 3,000 41...
Ledger Accounts, Adjusting Entries, Financial Statements, and Closing Entries; End-of-Period Spreadsheet. The unadjusted trial balance of...
Ledger Accounts, Adjusting Entries, Financial Statements, and Closing Entries; End-of-Period Spreadsheet. The unadjusted trial balance of Recessive Interiors at January 31, 2018, the end of the year, follows: Recessive Interiors Unadjusted Trial Balance January 31, 2018 Debit Balances Credit Balances 11 Cash 13,100 13 Supplies 8,000 14 Prepaid Insurance 7,500 16 Equipment 113,000 17 Accumulated Depreciation—Equipment 12,000 18 Trucks 90,000 19 Accumulated Depreciation—Trucks 27,100 21 Accounts Payable 4,500 31 Common Stock 30,000 32 Retained Earnings 96,400 33 Dividends 3,000 41...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT