2. An example of adjusting entries Imagine there is a company called XYZ Company that took out a loan from a bank on December 1, 2017. Deferrals The first interest payment is to be made on June 30, 2018, and the company is preparing its financial statements for the year ending December 31, 2017. Adjusting entries are made at the end of an accounting period to properly account for income and expenses not yet recorded in your general ledger, and should be … Adjusting entries, also called adjusting journal entries, are journal entries made at the end of a period to correct accounts before the financial statements are prepared. D. a debit to revenue and a credit to a liability. For example, entry for some purchases or sales made on the last day of the accounting period is a primary purchase-sales journal and not an adjusting entry. 12. Adjusting journal entries are completed at the end of an accounting period, and help to give a more accurate picture of a company’s financial status. The accounting process is made up of many key steps, and always includes performing adjusting entries. They pay you in September. Recording the expiration of prepaid insurance. An example of an adjusting entry would not include: Multiple Choice O Recordi Recording interest earned on bank account balances. As shown in the preceding list, adjusting entries are most commonly of three types, which are: Accruals. To record a revenue or expense that has not yet been recorded through a standard accounting transaction. These entries are completed at the end of a period to update balances in specific accounts in the general ledger. Top 3 Examples of Adjusting Entries Below are the examples of Adjusting Journal Entries. ( S. O. 1) An example of an adjusting entry would NOT include: A) Recording the use of office supplies. 5) An adjusting entry should never include: A. a debit to expense and a credit to a liability. An adjusting entry always involves either income or expense account. Recording the expiration of prepaid rent. Examples include utility bills, salaries, and taxes, which are usually charged in a later period after they have been incurred. Then, in September, you record the money as … C) Recording the expiration of prepaid insurance. Types. An example of an adjusting entry would not include: A. Recording the use of office supplies. Thus, adjusting entries impact the balance sheet, not just the income statement. Recording unpaid salaries. D) Paying salaries to company employees. B. a debit to expense and a credit to revenue. When the cash is paid, an adjusting entry is made to remove the account payable that was recorded together with the accrued expense previously. C. a debit to a liability and a credit to revenue. For example, an entry to record a purchase on the last day of a period is not an adjusting entry. B. B) Recording unpaid salaries. C. Recording unpaid salaries. Recording the purchase of office supplies. 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