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LESSON 16-1

LESSON 16-1. Recording Adjusting Entries. RECORDING ADJUSTING ENTRIES. General ledger account balances are changed only by posting journal entries Two types of journal entries change general ledger account balances at the end of a fiscal period:

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LESSON 16-1

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  1. LESSON 16-1 Recording Adjusting Entries

  2. RECORDING ADJUSTING ENTRIES • General ledger account balances are changed only by posting journal entries • Two types of journal entries change general ledger account balances at the end of a fiscal period: • Adjusting entries bring general ledger account balances up to date • Closing entries prepare temporary accounts for the next fiscal period • Adjusting entries recorded in a work sheet are journalized in a general journal • The adjusting entries are entered on a new general journal page. LESSON 16-1

  3. 2 1 4 6 5 7 ADJUSTING ENTRIES RECORDED FROM A WORK SHEET page 481 1. Heading 2. Date 3 3. Identify the first adjustment 4. Account debited 5. Debit 6. Account credited 7. Credit 8. Continue down the Adjustments columns LESSON 16-1

  4. ADJUSTING ENTRY FOR ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS page 482 The adjusted balance of Allowance for Uncollectible Accounts is the amount of the current accounts receivable the business expects to become uncollectible LESSON 16-1

  5. ADJUSTING ENTRY FOR MERCHANDISE INVENTORY page 482 The adjusted balance of Merchandise Inventory is the amount of the Inventory counted at the end of the fiscal year. LESSON 16-1

  6. ADJUSTING ENTRY FOR SUPPLIES—OFFICE page 483 • The adjusted balance of Supplies – Office is the amount of office supplies on hand at the end of the year. • The debit to Supplies Expense recognizes the amount of supplies used during the period LESSON 16-1

  7. ADJUSTING ENTRY FOR SUPPLIES—STORE page 483 • The adjusted balance of Supplies – Store is the amount of store supplies on hand at the end of the year. • The debit to Supplies Expense recognizes the amount of supplies used during the period LESSON 16-1

  8. ADJUSTING ENTRY FOR PREPAID INSURANCE page 484 • The adjusted balance of Prepaid Insurance is the amount of insurance not used yet. • The debit to Insurance Expense recognizes the amount of insurance used during the period LESSON 16-1

  9. ADJUSTING ENTRY FOR DEPRECIATION—OFFICE EQUIPMENT page 484 • The adjusted balance of Accumulated Depreciation is the cumulative amount of depreciation expensed over the life of the assets. • The debit to Depreciation Expense recognizes the amount of depreciation expensed during the period LESSON 16-1

  10. ADJUSTING ENTRY FOR DEPRECIATION—STORE EQUIPMENT page 485 LESSON 16-1

  11. ADJUSTING ENTRY FOR FEDERAL INCOME TAXES page 485 • Posing the extra payment of Federal Income Tax expense creates the tax liability for the remaining tax owed. LESSON 16-1

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