Question

What are the five types of adjusting entries? Define each type and provide an example of each.

Answer 1

a.	Accrued Revenues: If you perform a service for a customer in a month but don't bill the customer, so
	in ending of period, we make adjusting entry debit accounts receivable and credit service revenue.
b.	Accrued Expenses: Owes wages to employees at the end of an accounting period, is a type of accrued
	expense, we make adjusting entry debiting wage expenses and crediting wages payable.
c.	Unearned Revenues: It is advance receipt from customer for service or goods to be deliver in near end period
	So when we deliver goods or service to customer then we make adjusting entry debiting unearned revenue and
	crediting revenue.
d.	Prepaid Expenses: Prepaid expenses are assets that are paid for and then gradually used during the accounting
	period, We make an adjusting entry when we use that debit expense and prepaid .
e.	Depreciation: Depreciation is the method of expense of asset over the economic life of the asset
Date	Accounts Titles & Explanation	Debit	Credit
	Accounts Receivable
	Revenue
	Wages Expense
	Wages Payable
	Unearned Revenues
	Revenue
	Insurance Expense
	Prepaid Insurance
	Depreciation Expense
	Accumulated Depreciation