Adjusting entries are part of the Accounting Cycle and consist of entries made at the end of fiscal period as part of the Time Period Concept and to better match expenses and revenues.
Learning Goals
Explain why adjusting entries are necessary
Analyze information and decide whether an adjusting entry is needed
Record adjusting entries for prepaid expenses and unearned revenues in a general journal
Uses of Adjusting Entries
Match unearned revenue and prepaid expenses to the time period that the transaction occurred
Account for the use of supplies and depreciation in each period
Divide items that might have been paid in a lump sum into smaller periods (like rent and insurance)
Practice Activity
We will do some of this activity together in class and you will do some on your own. Click here.
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