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Adjusting EntriesA Puzzling Concept
Content by Dr. Kathleen Irwin; Media by PresenterMedia
• To begin unlocking this puzzle, let us introduce the two types of adjustments you might have to make at the end of the business cycle or period.
• Deferrals: when you prepay for something, or if you accept payment for services or merchandise prior to earning it.
• Accruals: revenues earned or expenses paid that need to be put on the books before closing.
What are Adjusting Entries??Deferrals and Accruals
• Deferrals Include:• Prepaid Expenses: Example• Unearned Revenues: Example
• Accruals Include• Accrued Revenues: Example• Accrued Expenses: Example
Putting it together
For more on Adjusting Entries, be sure to go through all the material in your Lesson and watch the homework assignment Video provided under Lesson 4.