Essays on Adjusting Entries

Adjusting of entries takes place at the end of accounting period. Adjusting entries is necessary because the dates on which actual transactions occur and thereby the dates of normal entries not always coincide with the date respective to the principles of accrual accounting and revenue recognition. There are two categories of adjusting entries. One of the categories is deferred revenues and expenses. Such adjustments are needed in case there has been a cash flow in the past, but respective revenues or expenses must be recorded now. The second category is called accrued revenues and expenses. In this case there ...

According to Porter & Norton, (2007), accounting cycle refers to a series of steps that are performed in each accounting period and that climax in the preparation of some financial statements. The accounting cycle is necessitated by the time period principle of accounting that requires the preparation of financial statements on a periodic basis. In the items listed, three are steps in the accounting cycle. These are;

Post Transactions in the Ledger

The totals of various transactions are transferred from the journals to the ledger periodically. In a manual system, the frequency of posting the transactions depend on the level of activity in the business ...

Adjusting process is the method of analyzing and correcting the accounts at the end of the period before the preparation of the financial statements while the journal entries that always update the accounts at the end of every accounting period is the adjusting entries (Godwin & Alderman, 2012). Firstly, it is important to make the appropriate journal analysis of each transaction during the adjustment procedure. Secondly, post every transaction to the respective ledgers. However, at the end of the accounting period, several balances in the ledger account can be reported without any change in the financial statements. For instance, the ...