0
Adjusting entries have to be made because a company's assets, expenses, and liabilities never stay the same from one accounting period to another. I will try to give you at least two examples of why adjusting entries must be made.
Example 1.
A customer purchases items on account for the amount of $500. When the sale is first made the company records this transaction in sales and accounts receivable. Let's just say it's the end of the month and the customer pays $250 on the amount she owes. The company must then make the adjusting entries to show that not only did they receive the money, but to show that the customer paid. An adjusting entry for the $250 will be made to CASH and the appropriate Accounts Receivable.
If the company did not make this adjusting entry, then the books would show them as not having collected any money from the customer and not only would the customers account be incorrect, the Cash balance for the company would be off.
---- Example 2.
A company pays for 12 months insurance. Each month part of what they paid expires, they have to make adjusting entries to this as each month of insurance expires to show that they have used that amount. Say the company pays $480 a year, each month $40 of that would expire (or be used up), the company must make adjusting entries to show that this has occurred or their Prepaid insurance account and expenses will not reflect what the company has actually done.
What else can I help you with?
What are the journal entries for receipt of a non taxable grant?
debit cashcredit grant received
Give three reasons why depreciation may occur?
because it has to be in the time to have a business you should have this kind of proposal
Can depreciation be charged on capital work in progress. Give reasons?
no depriciation is usually not charged on capital WIP
When business started with bank loan give the journal entries?
Bank A/c Dr. To Loan A/c Cr. Reason: here the business is not getting owners equity.
Can you give me examples of unearned service revenue journal entries?
Unearned service revenue is that amount which company has received from client in advance but actual goods or service is payable in future like repair and maintenance contract with client etc.
How is a fund flow statement prepared give answer with imaginary figures?
how is a fund flow statement prepared ?give your answer with imaginary figure.
What item does professa give you when you bet the elite for?
If you have over 60 entries in your pokedex he will give you the National Pokedex update.
Give reasons why blendig is done.?
give reasons why blendig is done
What cheezburger sites give you collectables?
icanhascheezburger, memebase, and yar.is/entries as of Dec 2011
Give at least 2 examples of adjusting entries?
I will give two examples but first I will give the original transaction then the "adjusting entry" that would be used.Prepaid Rent, many businesses that "rent" their buildings prepay for months at a time. Say you pay $5,000 a month for rent and you pay Six Months in Advance. It first goes on the books as follows.Prepaid Rent (Debit) $30,000Cash (credit) $30,000After the first month when the company reconciles their books, they need to show that one month of this rent has been "used up", this is an adjusting entry and is as followsRent Expense (debit) $5,000 (we only used one month)Prepaid Rent (credit) $5,000This "adjustment" is made monthly.The second one I will use isYour company purchased a computer on account. When you purchased the computer on account it became an account payable. You decide to make a payment toward the balance you owe, this will go in as an adjusting entry. The accounts would beAccount Payable (debit)Cash (credit)An adjusting entry is just what it's called, an entry to "adjust" an previous entry to it's current or new state. If you never adjusted entries, such as accounts payable, prepaid expense, etc, then your books would be inaccurate.
What entries would you add to the hostsallow file to give access to the web server from a network of 10.10.10.0?
http:10.1010.1
Is Catherine of Aragon prepared to give Henry VIII a divorce?
No she wasn't!
Compare the rate of transpiration from two surfaces of leaf and give reasons?
Compare the rate of transpiration from two surfaces of leaf and give reasons?"
Should you explain if the question says 'give two reasons why'?
If a question states "Give two reasons why." then yes, generally you will need to explain your reasoning.
Is there a homemade drain opener?
you have not give me the answer of my question, My question was how drain cleaner is to be prepared or its recipe in homemade,pl give me answer in this regards.
What are th two main reasons that government requires children to attend school?
1. to make sure that young people are prepared to support themselves and contribute to the economy. 2. to give them knowledge and skills they need to carry out the duties and responsibilities of the "Office Of Citizen"
Reasons for consigning the goods at invoice price?
Give reasons for consigning the goods at the invoice price.
