Steps to Adjusting Entries

In financial accounting, accountant’s work is divided into different parts. Pass the journal entries; post to ledger and make trial balance is normal part of duty. But, when the accounting period closes, accountant has to search some transactions which have not been recorded in the books. All these transactions are adjusted through journal entries. Its affect will be only profit and loss account and balance sheet. There will not any affect on the trial balance. Many of these transactions are existed due to applying of accrual accounting method. Outstanding and advance expenses and incomes need to adjust from actual amount of expenses and incomes.

 Following are its steps:

1st Step : Make the List of Transactions which need Adjustments

Accountant has to research for making adjustment entries. Suppose, Salary of 10 employees has not been paid till end of the period, this will be the outstanding salary. But, there may be other expenses which may be payable. All these expenses will go to the outstanding expenses category. Like this, we have to make the list incomes which earned but not received. Suppose, company declares divided but you did not receive. You have to take the rent from your tenant. For this, you have to check your time table and time when you close your financial year. Every expense or income may be some money which may be payable and receivable in the end of period. Except this, we also check which are advance payments of expense and which are advance receipt of income in the end of period. All these should be adjusted through adjustment entries.

2nd Step : Adjustment Entry of Outstanding Expenses

With adjustment entry, accountant increases the total amount of a particular expense. Total current liability will also increase. In this adjustment entry, expenses will be debited and outstanding expenses will be credited.

3rd Step : Adjustment Entry of Advance Expenses

With this adjustment entry, current asset will increase and our expense will decrease because we have paid money but still we did not get any service. In this adjustment entry, advance expense will be debited and expense account will be credited.

4th Step : Adjustment Entry of Oustanding Incomes

With this adjustment entry, our incomes will be increased. We add outstanding income in the particular income. Our current asset will also be increased. In this adjustment entry, outstanding income account will be debited and income account will be credited.






access account accountant Accounting accounting definitions accounting ebook Accounting education accounting procedure accounting process outsourcing Accounting Software advance advertising africa Amalgamation amendments announcements Annuity assets audit auditing Australia B.Com. balance sheet bank Bank reconciliation banking basic accounting BBA benefits best bill black money blog bloggers book keeping bookkeeping Branch Accounting - full tutorial budget Budget variance business businessman CA calculator canada capital capital budgeting career cash cash book cash flow statement Chiense children china class coaching coins college commerce commerce students company computer computer accounting conference Contact vinod kumar Control Your Spending corporate accounting cost cost accounting cost center cost centre CPA credit credit card cs currency data Debit and credit debit cards debt debtor degree depletion depreciation Diwali Messages documents dollar domain Downloads Dubai e-accounting earning education Education Loans email employee EPF ERP euromoney examination excel excise duty expenses facebook factor of loan fans feature fifo FII fiji finacle finance Financial financial accounting fire insurance flickr flow forensic forex formula france fraud free fun function fund GAAP GDP gdr germany gold goodwill goodwill accounting google google apps Google Adsense google apps google base google buzz google calendar Google docs google finance google fusion tables google talk govt. GST guide health Hindi Hindi Language history holding company How to treat FBT in Tally 9 HRA ICAI ICAWI ICICI Bank IFRS income income statement Income Tax India indian railway Indonesia inflation inflation accounting infographics information inspiration insurance insurance accounting Intangible interest international Internet Introduction of Tally 9 inventory investment investment in Shares invoice IT Japan Job costing journal entries Journal Entries eBook Help Kalculate keyboard kindle kuwait laptop law LBT learning lease lecture ledger leducation Leverage Analysis liabilities lifo linkedin loan logical point loss loss of profit M.Com. m.phil malaysia management accounting manual accounting manufacturing account market marketing mastercard material MBA MCA media migration mobile money ms word ms. excel multi currency in tally 9 Multicurrency Accounting mutual fund national security new and sacrifice ratio new york times new zealand news NGO nonprofit-accounting North Georgia Mountains NPV NSE odbc office oman online application online accounting Online Accounting Course otcei pakistan parents Partnership pay pal pdf Personal Finance pie chart pie chart of income pnb podcast ppf presentation price privacy policy prize money prof. vinod kumar profit profit and loss account project management provision purchase puzzles quickbooks Quote quotes quotes of svtuition rating agency ratio analysis RBI readers real estate rectification of errors remote control reports reserves responsibility accounting retirement revenue Revenue reserves review risk rupees salary sale saudi arabia saving sbi scholarship school SEBI security service tax share share trading Shares shri lanka singapore sms social accounting society solution South Africa stock stock exchange structure student students study subsidiary company svtuition swiss bank tally tally 9 Tally 7.2 Tally 9 Tally.ERP 9 tanzania tax Tax Accounting TDS teacher teaching technology test testimonial testimonials thailand tips trading trading on equity transaction trend trial balance truthfulness tuition twitter UAE UGC - NET Commerce UK United Arab Emirates university usa valuation VAT Video Voucher and vouching Wealth wikipedia working capital youtube
Accounting Education: Steps to Adjusting Entries
Steps to Adjusting Entries
Accounting Education
Not found any lecture VIEW ALL Continue reading Reply Cancel reply Delete By Home PAGES Lectures View All RECOMMENDED FOR YOU Category ARCHIVE SEARCH ALL Lectures Not found any lecture match with your request, please help to write it and send it to our email at for making this website free accounting and finance encyclopedia. Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS CONTENT IS PREMIUM Please share to unlock