ADJUSTING JOURNAL ENTRIES ADJUSTING ENTRIES – Purpose is to MAKE SURE THE T ACCOUNTS ARE CORRECT. (REFLECT ECONOMIC REALITY)

REASONS FOR ERRORS T ACCOUNTS ARE OFTEN WRONG DURING THE YEAR. WHY? JOURNAL ENTRY NOT MADE (Omiteed) JOURNAL ENTRY MADE FOR WRONG AMOUNT JOURNAL ENTRY MADE TO WRONG ACCOUNT PASSAGE OF TIME THEFT

TO ADJUST CASH CASH SHORT AND OVER EXPENSE XXX CASH XXX

TO ADJUST MARKETABLE SECURITIES LOSS ON MARKETABALE SECURITIES XXX MARKETABLE SECURITIES XXX

TO ADJUST ACCOUNTS RECEIVABLE BAD DEBT EXPENSE XXX ALLOWANCE FOR DOUBTFUL ACCOUNTS XXX

TO ADJUST INVENTORY COST OF GOODS SOLD XXX INVENTORY XXX

TO ADJUST PREPAIDS SUPPLIES EXPENSE XXX SUPPLIES

TO ADJUST EQUIPMENT DEPRECIATION EXPENSE XXX ACCUMULATED DEPRECIATION XXX

TO ADJUST FOR NOTES PAYABLE INTEREST EXPENSE XXX INTEREST PAYABLE XXX

THERE ARE OTHER ADJUSTING ENTRIES THE COMMON ONES HAVE BEEN JUST COVERED

THOUGHT PROCESS FOR ADJUSTING ENTRIES 1. WHAT IS THE AMOUNTS IN THE T ACCOUNT? 2. WHAT SHOULD BE THE AMOUNT FROM THE REAL WORLD? 3. WHAT IS THE DIFFERENCE BETWEEN THE TWO 4. MAKE THE NECESSARY JOURNAL ENTRY