In order for a company's financial statements to be complete and to reflect the accrual method of accounting, adjusting entries must be processed before the financial statements are issued.
Not all of a company's financial transactions that pertain to an accounting period will have been processed by the accounting software as of the end of the accounting period. For example, the bill for the electricity used during December might not arrive until January 10. (The reason for the 10-day lag is that the electric utility reads the meters on January 1 in order to compute the electricity actually used in December. Next the utility has to prepare the bill and mail it to the company.)
Sometimes a bill is processed during the accounting period, but the amount represents the expense for one or more future accounting periods. For example, the bill for the insurance on the company's vehicles might be $6,000 and covers the six-month period of January 1 through June 30. If the company is required to pay the $6,000 in advance at the end of December, the expense needs to be deferred so that $1,000 will appear on each of the monthly income statements for January through June
Something similar to Situation 2 occurs when a company purchases equipment to be used in the business. Let's assume that the equipment is acquired, paid for, and put into service on May 1. However, the equipment is expected to be used for ten years. If the cost of the equipment is $120,000 and will have no salvage value, then each month's income statement needs to report $1,000 for 120 months in order to report depreciation expense under the straight-line method.
accrued expenses,accrued revenues,prepaid expenses,advnace receipts of income and many more all these are adjusting accounts that are to be adjusted at the year end
An accrued revenue is one that occurs when a sale is made or services are performed in one accounting period but payment is not received until a later period. An accrued expense is an expense that has occurred in one accounting period but won't be paid until another period. A deferred revenue is money that has been paid in advance for a service that will be performed later. A deferred expense is an expense that has been paid in advance and will be expensed out at a later date.
Explain and discuss four types of accounting adjustments with examples
Identify and thoroughly discuss the four types of conflict cultures, using examples.
identify and explain with examples Four types of models in research?
(10) Discuss and explain each of the "Four Costs of Quality." Provide examples. Are all four costs of quality equal in cost and priority?
With examples, explain the two types of signals (Analog and Digital) and two types of data (Analog and Digital). With the above combinations, provide the real life applications and examples for the communication of the above four combinations. (10 marks)
DB 1- What four different types of adjustments are frequently necessary before financial statements are prepared at the end of an accounting period? Give at least one example of each type.
Discuss the disclosure requirement on accounting policies, and identify at least two (2) examples of the most commonly required disclosure. Explain the key ways in which the examples you provided are useful to financial statement users.
Describe the four types of inventory. Give examples.
1) Name the four (4) types of adjustments that are necessary for transactions and events that extend over more than one period (HINT: This is from Chapter 3) 2) From your answer on Question 1, provide me with an adjustment example, explain why it is done and provide the adjusting entry in JOURNAL ENTRY FORMAT that would be done for one of the adjustment types. Your answer must contain the type of adjustment it is, why it is done and...
1. What is the purpose of adjusting entries? 2. Name the four general types of adjustments. 3. Give three examples of accrued expenses. 4. Briefly explain why it is difficult for accountants to determine whether or not revenue has been earned if the sales process is not complete. 5. Give an example of business or industry where customers usually pay for the product or service in advance. 6. What type of account is unearned revenue? 7. When should a company...
Discuss the cash basis of accounting versus the accrual basis of accounting. Include * examples and references to any relevant principles. (3 marks)