Recording Adjusting and Closing Entries for a Service Business Chapter 8, Section 1

Review Accounting Concepts CONCEPT: Accounting Period Cycle CONCEPT: Adequate Disclosure CONCEPT: Matching Expenses with Revenue

Adjusting Entries Planned on worksheet Must be journalized Bring asset and expense accounts up-to- date. Always recorded on a NEW journal page. Heading “Adjusting Entries” is written to explain why there are no source document numbers.

Adjusting Entry for Supplies Write the title of the account credited. Record the credit amount. 3.Write the title of the account debited. Record the debit amount. 2.Write the date. 1.Write the heading.

Adjusting Entry for Prepaid Insurance Write the title of the account credited. Record the credit amount. 2.Write the title of the account debited. Record the debit amount. 1.Write the date.

Audit Your Understanding Why are adjusting entries journalized? Where is the information obtained to journalize adjusting entries? What accounts are increased from zero balances after adjusting entries for supplies and prepaid insurance are journalized and posted?

Problems Work Together 8-1  Textbook pg. 205 On Your Own 8-1  Textbook pg. 205 Application 8-1  Textbook pg. 221