Accounting Homework
Hyzel May V. Rendon
BSIT-3A
Accounting
March 14, 2009
- What is an adjusting entry?
- It is a bookkeeping entry made at the end of an accounting period to assign income and expenses to a different period. These entries are made under the accrual accounting systems in order to correctly reflect the timings of income and expenditure. Some adjusting entries include accounts receivable, accounts payable, depreciation and amortization.
2.Example of an adjusting entry
-Accounts Receivable
- Consulting Fees Earned
- Unearned Revenue
- Revenue
- Salary Expense
- Wages and Salaries Payable
- Property & Casualty Expense
- Prepaid Insurance
- Depreciation Expense
- Accumulated Depreciation - Equipment
3.Deferrals and Accruals
- Deferrals for revenues and expenses that are matched to dates after the transaction has been recorded.
- Some deferred items for which adjusting entries would be made include:
· Prepaid insurance
· Prepaid rent
· Office supplies
· Depreciation
· Unearned revenue
- Accruals for revenues and expenses that are matched to dates before the transaction has been recorded.
- Some accrued items for which adjusting entries may be made include:
· Salaries
· Past-due expenses
· Income tax expense
· Interest income
· Unbilled revenue
