Adjusting Accounts

Purpose of Adjusting ,[object Object],[object Object],[object Object],[object Object]

Adjusting Entries ,[object Object],Adjustments Prepaid Expenses Amortization Unearned Revenues Accrued expenses Accrued revenues

Prepaid Expenses ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],To record expired insurance 150 150 Insurance Expense Prepaid Insurance Jan. 31 Credit Debit PR Account Titles and Explanation Date

Amortization ,[object Object],[object Object],[object Object],[object Object]

Straight-line Amortization ,[object Object],[object Object],Cost of asset – Estimated value at end of estimated useful life Estimated Useful Life Monthly Amortization = 30000 – 6000 60 = 400

Adjusting Entry ,[object Object],[object Object],[object Object],To record monthly amortization on furniture 400 400 Amortization Expense, Furniture Accumulated Amortization, Furniture Jan. 31 Credit Debit PR Account Titles and Explanation Date

Unearned Revenues ,[object Object],[object Object],[object Object],[object Object],To record earned portion of revenue received in advance. 100 100 Unearned Revenue Revenue Jan. 31 Credit Debit PR Account Titles and Explanation Date

Accrued Expenses ,[object Object],[object Object],[object Object],[object Object],To record three days’ accrued salary 270 270 Salaries Expense Salaries Payable Jan. 31 Credit Debit PR Account Titles and Explanation Date

Accrued Revenues ,[object Object],[object Object],[object Object],[object Object],To record 16 days’ accrued revenue. 2880 2880 Accounts Receivable Consulting Revenue Jan. 31 Credit Debit PR Account Titles and Explanation Date

Accrual Adjustments in Later Periods ,[object Object],Paid two weeks salary including three days accrued in January 900 270 630 Salaries Payable Salaries Expense Cash Feb. 9 Credit Debit PR Account Titles and Explanation Date

Adjusting Accounts

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