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73a5adc5-949c-4b23-9832-b32ecf7cce8f | [
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-0.... | completed. His business savings account earned interest. Some of his customers had paid in advance for their
dry cleaning, with Mark's business providing the service during the month.
What should Mark do with all of these events? Does he have a responsibility to record these transactions? If
so, how would he go abou... | {"upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "creationdate": "2019-04-24T10:32:54-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "moddate": "2020-08-05T15:26:11-05:00", "source": "downloads\\business\\accounting\\FinancialAcco... |
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accounting cycle (Figure 4.2).
Figure 4.2
The Basic Accounting Cycle. In this chapter, we examine the next three steps in the accounting
cycle—5, 6, and 7—which cover adjusting entries (journalize and post), p... | {"source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "uploaded_via": "batch_uploader", "batch_upload": true, "file_size_mb": 156.7, "creationdate": "2019-04-24T10:32:54-05:00", "total_pages": 1055, "file_type": ".... |
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... | entries (journalizing and posting), prepare an adjusted trial balance, and prepare the financial statements
(Figure 4.3).
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
213
Figure 4.3
Steps 5, 6, and 7 in the Accounting Cycle. (attribution: Copyrig... | {"file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)", "title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\Financi... |
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0.0371... | (GAAP) or International Financial Reporting Standards (IFRS), as allowed under the Securities and Exchange
Commission (SEC) regulations. Also, companies, public or private, using US GAAP or IFRS prepare their
financial statements using the rules of accrual accounting. Recall from Introduction to Financial Statements
... | {"creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "producer": "Prince 11 (www.p... |
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-... | information trying to make investment or lending decisions, and to internal users trying to make decisions
about company performance, budgeting, and growth strategies.
Some nonpublic companies may choose to use cash basis accounting rather than accrual basis accounting to
report financial information. Recall from In... | {"file_name": "FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creationdate": "2019-04-24T10:32:54-05:00", "produce... |
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and cash basis accounting. The second is tax basis accounting that is used in establishing the tax effects of
transactions in determining the tax liability of an organization.
One fundamental concept to consider r... | {"file_type": ".pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "creationdate": "2019-04-24T10:32:54-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "upload_timestamp": "2026-02-07T07... |
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214
Chapter 4 The Adjustment Process
statements called 10-Qs. However, most public and private companies keep monthly, quarterly, and yearly
(annual) period information. This is useful to users needing up-to-date ... | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf"... |
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glance, it might seem that no such adjustment entries are necessary. However, grocery stores have
adapted to the current retail environment. For example, your local grocery store might provide catering
services for ... | {"upload_timestamp": "2026-02-07T07:23:08.167529", "file_name": "FinancialAccounting-OP.pdf", "file_type": ".pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "batch_upload": true, "uploaded_via": "batch_uploader", "producer": "Prince 11 (www.princexml.com)", "title": "Principles of Accounting, Volume 1: Financial Ac... |
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useful for businesses needing to coincide with a traditional yearly tax schedule. It can also be easier to track
for some businesses without formal reconciliation practices, and for small businesses.
A fisca... | {"file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "total_pages": 1055, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "upload_timestamp": "2026-02-07T07... |
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An interim period is any reporting period shorter than a full year (fiscal or calendar). This can encompass
monthly, quarterly, or half-year statements. The information contained on these statements is timelier than
waiting for a yearly accounting period to end. The most common interim period is thre... | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "batch_upload": true, "upload_timestamp": "2026-02-07T07:23:08.167529", "total_pages": 1055, "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (www.princexml.com)", "file_name": "Financia... |
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In order for information to be useful to the user, it must be timely—that is, the user has to get it quickly
enough so it is relevant to decision-making. You may recall from Analyzing and Recording Transactions that
This OpenStax book is available for free at http... | {"uploaded_via": "batch_uploader", "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "total_pages": 1055, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "source_file": "downloads\\busines... |
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the information that is both timely and relevant to decision-making.
The accounting period a company chooses to use for financial reporting will impact the types of adjustments
they may have to make to cer... | {"file_size_mb": 156.7, "creator": "DocBook XSL Stylesheets V1.79.1", "total_pages": 1055, "creationdate": "2019-04-24T10:32:54-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "uploaded_via": "batch_uploader", "upload_timestamp": "2026-02-07T07:23:08.167529", "producer": "Prince... |
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0.... | income and growth to create the appearance that it was meeting its own targets and Wall Street
analysts’ earnings estimates during the years 2000 and 2001. The SEC describes some of what occurred:
Bristol-Myers inflated its results primarily by (1) stuffing its distribution channels with excess
inventory near the end... | {"producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00"... |
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enough to meet earnings targets, the company improperly used divestiture reserve funds (a “cookie jar”
fund that is funded by the sale of assets such as product lines or divisions) to meet those targets. In this
circums... | {"file_name": "FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "batch_upload": true, "upload_timestamp": "2026-02-07T07:23:08.167... |
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stock/or capital) must be equal, it must remain equal after you make adjusting entries. Also note that in this
equation, owner’s equity represents an individual owner (sole proprietorship), common stock repr... | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "producer": "Prince 11 (www.princexml.com)", "creationdate": "2019-04-24T... |
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trial balance. You might question the purpose of more than one trial balance. For example, why can we not go
from the unadjusted trial balance straight into preparing financial statements for public consumpt... | {"uploaded_via": "batch_uploader", "file_size_mb": 156.7, "producer": "Prince 11 (www.princexml.com)", "file_type": ".pdf", "total_pages": 1055, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "source_file": "downloads\\business\\accounting\\Financi... |
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-0.05... | Analyzing and Recording Transactions for the example company, Printing Plus.
Figure 4.4 Unadjusted Trial Balance for Printing Plus. (attribution: Copyright Rice University, OpenStax,
under CC BY-NC-SA 4.0 license)
The trial balance for Printing Plus shows Supplies of $500, which were purchased on January 30. Since t... | {"producer": "Prince 11 (www.princexml.com)", "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_size_mb": 156.7, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "creationdate": "2019-04-24T10:32:54-05:00", "file_name": "FinancialAccounting-OP... |
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without providing the service. To clear this liability, the company must perform the service. Assume that as of
January 31 some of the printing services have been provided. Is the full $4,000 still a liability? Sin... | {"uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "file_name": "Fin... |
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-0.... | cycle up to this point. So why are the balances still incorrect?
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
217
Journal entries are recorded when an activity or event occurs that triggers the entry. Usually the trigger is from
an original source... | {"batch_upload": true, "moddate": "2020-08-05T15:26:11-05:00", "file_name": "FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "title": "Principles of Accounting, Volume 1: Financial Accounting", "source": "downloads\\business\\accounting\\... |
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for services yet provided, the cash received will trigger a journal entry. When the company provides the
printing services for the customer, the customer will not send the company a reminder that revenue has now
b... | {"source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "batch_upload": true, "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBoo... |
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... | inventory still available. Another difference was interest earned from his bank account. He did not have
anything recognizing these earnings.
Why did his unadjusted trial balance have these errors? What can be attributed to the differences in
supply figures? What can be attributed to the differences in interest earn... | {"file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "batch_upload": true, "total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-O... |
51d6dff0-f5d4-4f06-98e3-a20dad2b8e86 | [
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-0.0048337411135435104,
0.009074412286281586,
-0.05435867980122566,
0.0016525308601558208,
-0.0... | • Some costs are not recorded during the period but must be recognized at the end of the period, such as
depreciation, rent, and insurance.
• Some items are forthcoming for which original source documents have not yet been received, such as a
utility bill.
There are a few other guidelines that support the need for ... | {"file_size_mb": 156.7, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Prince 11 (www.princexml.com)", "title": "Principles of Accounting, Volume 1: Financial Accounting", "total_pages": 1055, "batch_upload": true, "source_file": "downloads\\business\\accounting\\FinancialAccounti... |
57eac047-59da-4b6c-98e2-df50abdb6980 | [
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0.025791281834244728,
-0.023410091176629066,
-0.005054148845374584,
-0.0... | revenues earned, which affects accounts such as insurance expense and supplies expense.
• Time period assumption: This requires useful information be presented in shorter time periods such as
years, quarters, or months. This means a company must recognize revenues and expenses in the proper
period, requiring adjustm... | {"moddate": "2020-08-05T15:26:11-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creator": "DocBook XSL Stylesheets V1.79.1", "file_type": ".pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_size_mb": 156.7, "producer": "Prince 11 (www.princexml.c... |
6cfc6ab4-2d67-4235-9b52-b662df5167c5 | [
-0.1284458041191101,
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-0.03490789234638214,
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0.025158194825053215,
0.08090424537658691,
0.030980335548520088,
0.025595681741833687,
-0.0668339... | updates, only those not naturally triggered by an original source document. There are two main types of
adjusting entries that we explore further, deferrals and accruals.
Deferrals
Deferrals are prepaid expense and revenue accounts that have delayed recognition until they have been used
or earned. This recognition ... | {"producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_type": ".pdf", "file_size_mb": 156.7, "uploaded_via": "batch_uploader", "moddate": "2020-08-05T15:26:11-05:00", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accountin... |
051b6125-610d-412e-833a-dd3ed0f31204 | [
-0.0861763134598732,
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-0.06460819393396378,
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0.08466079086065292,
0.08536834269762039,
0.015203063376247883,
0.00020159401174169034,
-0.08... | advanced payment has occurred, before the company can benefit from use. As soon as the asset has provided
benefit to the company, the value of the asset used is transferred from the balance sheet to the income
statement as an expense. Some common examples of prepaid expenses are supplies, depreciation, insurance,
an... | {"total_pages": 1055, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "producer": "Prince 11 (www.princexml.com)", "moddate": "2020-08-05T15:26:11-05:00", "upload_timestamp": "2026-02-07T07:2... |
c3c8d9e2-e96a-4725-835b-7e4569b3b155 | [
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-0.011938082985579967,
0.033649884164333344,
0.03634078428149223,
-0.04969637840986252,
0.05916818603873253,
... | took an inventory of supplies used and determined the value of those supplies used during the period to be
$150. The following entry occurs for the initial payment.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
219
Supplies increases (debit) for $4... | {"upload_timestamp": "2026-02-07T07:23:08.167529", "file_type": ".pdf", "producer": "Prince 11 (www.princexml.com)", "uploaded_via": "batch_uploader", "total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf... |
0db1c693-7542-4127-b9dc-a009c04351ca | [
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0.02465648390352726,
0.044721569865942,
0.011273740790784359,
0.04636947065591812,
-0.03279... | the Supplies account. This amount will carry over to future periods until used. The balances in the Supplies and
Supplies Expense accounts show as follows.
Depreciation may also require an adjustment at the end of the period. Recall that depreciation is the systematic
method to record the allocation of cost over a g... | {"uploaded_via": "batch_uploader", "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "source": "downloads\\business\\... |
cd3e4422-fda3-4ace-80a9-51d5d2c19c83 | [
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0.05158090591430664,
0.028322717174887657,
-0.002206014934927225,
0.1007676050066948,
-0.0609... | balance for Accumulated Depreciation is on the credit side. It houses all depreciation expensed in current and
prior periods. Accumulated Depreciation will reduce the asset account for depreciation incurred up to that
point. The difference between the asset’s value (cost) and accumulated depreciation is called the bo... | {"file_size_mb": 156.7, "producer": "Prince 11 (www.princexml.com)", "moddate": "2020-08-05T15:26:11-05:00", "uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_name": "FinancialAccounting-OP.pdf", "to... |
014be283-a93c-4163-9c0e-51ff5c621b5a | [
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0.013219126500189304,
0.033388588577508926,
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-0.10386065... | depreciation of the equipment.
Depreciation Expense increases (debit) and Accumulated Depreciation, Equipment, increases (credit). If the
company wanted to compute the book value, it would take the original cost of the equipment and subtract
accumulated depreciation.
220
Chapter 4 The Adjustment Process
Book valu... | {"batch_upload": true, "file_type": ".pdf", "total_pages": 1055, "title": "Principles of Accounting, Volume 1: Financial Accounting", "uploaded_via": "batch_uploader", "file_size_mb": 156.7, "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "file_hash": "89738e550d63820fbb3... |
3d0a4abc-9c5c-46de-9000-6c55bda2ef72 | [
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0.05372306704521179,
0.0841875672340393,
0.08779340982437134,
0.046651676297187805,
-0.0698977... | would sell. For example, you might have a building for which you paid $1,000,000 that currently has been
depreciated to a book value of $800,000. However, today it could sell for more than, less than, or the same as
its book value. The same is true about just about any asset you can name, except, perhaps, cash itself... | {"uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_size_mb": 156.7, "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages": 1055, "title": "Principles of Accounting, Volume... |
f37816e2-d750-4168-87e4-9d6b2302aeab | [
0.01920502632856369,
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0.09091230481863022,
0.03620932996273041,
0.0006982354680076241,
0.05396853759884834,
-0.... | month. The following entries show the initial payment for the policy and the subsequent adjusting entry for
one month of insurance usage.
In the first entry, Cash decreases (credit) and Prepaid Insurance increases (debit) for $4,500. In the second
entry, Prepaid Insurance decreases (credit) and Insurance Expense inc... | {"producer": "Prince 11 (www.princexml.com)", "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0... |
2db63400-fbe3-4d80-89ef-616295711a16 | [
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0.012659940868616104,
0.05464541167020798,
-0.05... | This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
221
rent used for the month.
Let’s say a company pays $8,000 in advance for four months of rent. After the first month, the company
records an adjusting entry for the rent used. The following entries sh... | {"total_pages": 1055, "uploaded_via": "batch_uploader", "file_size_mb": 156.7, "file_name": "FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "ba... |
c8649fd9-2cdd-46d9-b9c5-1e124e469561 | [
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-0.02495221048593521,
0.0920545682311058,
0.02868145890533924,
0.03234222158789635,
-0.031101... | Another type of deferral requiring adjustment is unearned revenue.
Unearned Revenues
Recall that unearned revenue represents a customer’s advanced payment for a product or service that has yet
to be provided by the company. Since the company has not yet provided the product or service, it cannot
recognize the custo... | {"creationdate": "2019-04-24T10:32:54-05:00", "file_type": ".pdf", "total_pages": 1055, "uploaded_via": "batch_uploader", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "title": "Principles of ... |
ef51f058-ec57-4b49-b09e-a4f0c14a62e8 | [
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-0.011060481891036034,
0.05236116796731949,
-0.07050838321447372,
0.009230618365108967,
-0.06900... | $48,000 was probably collected on the same day, we record it as if it was for simplicity’s sake.
In this case, Unearned Fee Revenue increases (credit) and Cash increases (debit) for $48,000.
At the end of the year after analyzing the unearned fees account, 40% of the unearned fees have been earned.
222
Chapter 4 Th... | {"creationdate": "2019-04-24T10:32:54-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "uploaded_via": "batch_uploader", "file_name": "FinancialAccounting-OP.pdf", "batch_upload": true, "total_pages": 1055, "produc... |
1883226f-64c3-4bb7-bf83-3ed06ff4be19 | [
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0.03620124235749245,
0.03135893493890762,
0.010288211517035961,
-0.011849969625473022,
-0.030... | unrecorded. The two specific types of adjustments are accrued revenues and accrued expenses.
Accrued Revenues
Accrued revenues are revenues earned in a period but have yet to be recorded, and no money has been
collected. Some examples include interest, and services completed but a bill has yet to be sent to the
cus... | {"upload_timestamp": "2026-02-07T07:23:08.167529", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb... |
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0.049946751445531845,
0.05814659595489502,
0.0035236303228884935,
0.029028329998254776,
-... | even if cash has yet to be collected.
For example, assume that a company has one outstanding note receivable in the amount of $100,000. Interest
on this note is 5% per year. Three months have passed, and the company needs to record interest earned on
this outstanding loan. The calculation for the interest revenue ea... | {"creator": "DocBook XSL Stylesheets V1.79.1", "batch_upload": true, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "file_type": ".pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a83... |
6e7bdde5-13cf-4ac5-96bb-dc832a4a6414 | [
-0.0799960047006607,
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0.012702103704214096,
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-0.056388210505247116,
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-0.03977... | client for the work. This means the customer has also not yet paid for services. Since there was no bill to
trigger a transaction, an adjustment is required to recognize revenue earned at the end of the period.
For example, a company performs landscaping services in the amount of $1,500. However, they have not yet
r... | {"total_pages": 1055, "file_name": "FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "upload_timestamp": "2026-02-07T07:23:08.167529", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "batch_upload": true, "creator": "DocBoo... |
d35ba971-2f51-4522-a7c3-6d0b2b2c4813 | [
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0.06105944514274597,
0.0351765900850296,
-0.0025414612609893084,
-0.03950688615441322,
-0.0... | paid. Some examples include interest, tax, and salary expenses.
Interest expense arises from notes payable and other loan agreements. The company has accumulated
interest during the period but has not recorded or paid the amount. This creates a liability that the company
must pay at a future date. You cover more det... | {"moddate": "2020-08-05T15:26:11-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529", "title": "Principles of Accounting, Volume 1: Financial Accounting", "producer": "Prince 11 (www.princexml.com)", "batch_upload": true, "file_name": "FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664... |
9dfe19f8-e71e-44e8-a703-a9475637c7c3 | [
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0.06535232067108154,
-0.02132294327020645,
-0.043209996074438095,
-0.1... | during a period that are unpaid require adjustment at the end of a period. This creates a liability for the
company. Some tax expense examples are income and sales taxes.
For example, a company has accrued income taxes for the month for $9,000. The company would record the
following adjusting entry.
Income Tax Expe... | {"uploaded_via": "batch_uploader", "title": "Principles of Accounting, Volume 1: Financial Accounting", "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "2019-04-24T10:32:54-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "file_hash": "89738e5... |
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0.05462417006492615,
0.04883306846022606,
-0.040747858583927155,
-0.011112809181213379,
-0.... | month to show salaries previously unrecorded and unpaid at the end of the month.
Let’s say a company has five salaried employees, each earning $2,500 per month. In our example, assume that
they do not get paid for this work until the first of the next month. The following is the adjusting journal entry
for salaries.... | {"creator": "DocBook XSL Stylesheets V1.79.1", "file_size_mb": 156.7, "uploaded_via": "batch_uploader", "moddate": "2020-08-05T15:26:11-05:00", "total_pages": 1055, "file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529", "producer": "Prince 11 (www.princexml.c... |
c0a862d2-35a4-49de-9df0-61223c6610a7 | [
-0.028997670859098434,
0.036881618201732635,
0.03929892182350159,
-0.06430873274803162,
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0.03229346498847008,
0.02538171038031578,
0.006448097061365843,
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0.04752066358923912,
0.09178124368190765,
-0.0661722794175148,
0.031514719128608704,
-0.0889... | Y O U R T U R N
Adjusting Entries
Example
Income Statement Account
Balance Sheet Account
Cash in Entry?
Table 4.1
Review the three adjusting entries that follow. Using the table provided, for each entry write down the
income statement account and balance sheet account used in the adjusting entry in the approp... | {"producer": "Prince 11 (www.princexml.com)", "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "moddate": "2020-08-05T15:26:11-05:00", "file_size_mb": 156.7, "upload_timestamp": "2026-02-07T07:23:08.167529", "title": "Principles of Accounting, Volume 1: Financial Accounting", "batch_uploa... |
8d398a19-316d-42e2-8a5b-a28bbe6dcb9a | [
-0.06405804306268692,
0.039322689175605774,
0.024678096175193787,
-0.03130986541509628,
-0.010905524715781212,
0.053477562963962555,
0.0003495437267702073,
-0.012027973309159279,
-0.07068996876478195,
0.014574575237929821,
0.06225691735744476,
-0.05471065640449524,
0.01555706188082695,
-0.... | Did we continue to follow the rules of adjusting entries in these two examples? Explain.
Example
Income Statement Account
Balance Sheet Account
Cash in Entry?
Table 4.3
Solution
Yes, we did. Each entry has one income statement account and one balance sheet account, and cash
does not appear in either of the adju... | {"moddate": "2020-08-05T15:26:11-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6... |
e40a6f51-82e0-46d4-aad8-f69b5963cceb | [
-0.05970374122262001,
0.050894543528556824,
0.007342509459704161,
-0.02083047293126583,
-0.021679701283574104,
0.006849231198430061,
0.06498628854751587,
-0.022556569427251816,
0.0415516123175621,
-0.00011095628724433482,
0.045065294951200485,
-0.0697912946343422,
-0.004404101055115461,
-0... | entries:
• Every adjusting entry will have at least one income statement account and one balance sheet account.
• Cash will never be in an adjusting entry.
• The adjusting entry records the change in amount that occurred during the period.
What are “income statement” and “balance sheet” accounts? Income statement a... | {"file_type": ".pdf", "uploaded_via": "batch_uploader", "producer": "Prince 11 (www.princexml.com)", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "total_pages": 1055, "title": "Principles of Accounting, Volume 1: Financial Accounting", "... |
2f619cc4-1aa6-46a0-9cb4-acfc636c5d68 | [
-0.09276137501001358,
0.061502374708652496,
-0.05050160363316536,
-0.0092025026679039,
-0.057009257376194,
0.022954657673835754,
-0.011299063451588154,
-0.008437123149633408,
-0.00980860460549593,
0.030857538804411888,
0.09167706221342087,
0.0000353174218616914,
-0.03253459185361862,
-0.08... | which has not already been recorded. If accountants find themselves in a situation where the cash account
must be adjusted, the necessary adjustment to cash will be a correcting entry and not an adjusting entry.
With an adjusting entry, the amount of change occurring during the period is recorded. For example, if the... | {"batch_upload": true, "file_size_mb": 156.7, "file_name": "FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "total_pages": 1055, "file_type": ".pdf", "uploaded_via": "batch_uploader", "producer": "Prince 11 (www.princexml.com)", "creationdate": "2019-04-24T1... |
37315f70-bcea-41a6-984a-310023ed2738 | [
0.026107357814908028,
0.09278329461812973,
-0.009917215444147587,
0.03568294644355774,
-0.017337115481495857,
-0.015552772209048271,
-0.018495304509997368,
0.016773493960499763,
0.058868926018476486,
0.021213682368397713,
0.017260601744055748,
0.00663358997553587,
-0.003994717262685299,
-0... | C O N C E P T S I N P R A C T I C E
Earnings Management
Recording adjusting entries seems so cut and dry. It looks like you just follow the rules and all of the
numbers come out 100 percent correct on all financial statements. But in reality this is not always the
case. Just the fact that you have to make estim... | {"file_name": "FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creator": "DocBook XSL Stylesheets V1.79.1", "title": "Principles of Accounting, Volume 1: Financial Accounting", "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "file_type": "... |
3f78a527-e626-44f2-82ad-0074a0d95bba | [
0.012754915282130241,
0.07714642584323883,
0.020098693668842316,
0.03113580122590065,
-0.012157624587416649,
-0.006988975219428539,
-0.06588169932365417,
0.00886744074523449,
-0.049625955522060394,
0.050187233835458755,
-0.023876409977674484,
0.045625071972608566,
0.04196634888648987,
-0.0... | books instead of expensing them when they should to decrease total expenses and increase profit.
Take Mexico-based home-building company Desarrolladora Homex S.A.B. de C.V. This company reported
revenue earned on more than 100,000 homes they had not even build yet. The SEC’s complaint states
that Homex reported reve... | {"total_pages": 1055, "creationdate": "2019-04-24T10:32:54-05:00", "file_name": "FinancialAccounting-OP.pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creator": "DocBook XSL Stylesheets V1.79.1", "moddate": "2020-08-05T15:26:11-05:00", "source": "downloads\\business\\accounting\\FinancialAc... |
f293d35b-eb49-4644-a48e-23fdb1797927 | [
-0.045801885426044464,
0.08707364648580551,
0.06355338543653488,
-0.006658315658569336,
-0.043785035610198975,
0.029983744025230408,
-0.0399768240749836,
0.024926600977778435,
0.003101119538769126,
0.06712620705366135,
0.1009422168135643,
0.026105092838406563,
-0.0066332039423286915,
-0.04... | and insist the new estimate is really better when maybe it is your way to improve the bottom line, for
example, changing your annual depreciation expense calculated on expensive plant assets from
assuming a ten-year useful life, a reasonable estimated expectation, to a twenty-year useful life, not so
228
Chapter 4 ... | {"total_pages": 1055, "file_type": ".pdf", "producer": "Prince 11 (www.princexml.com)", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.p... |
866c339c-1690-4b0e-ba3f-9d72e871cf64 | [
-0.07039988785982132,
-0.023568304255604744,
0.0367075577378273,
-0.051913339644670486,
-0.04780396819114685,
0.040844984352588654,
0.04439413920044899,
-0.007636137772351503,
0.0018031587824225426,
0.024928200989961624,
0.08705255389213562,
-0.0023047367576509714,
-0.022425871342420578,
-... | manage their earnings in a way that the SEC believes is actual fraud and charges the company with the
illegal activity.
Recording Common Types of Adjusting Entries
Recall the transactions for Printing Plus discussed in Analyzing and Recording Transactions.
Jan. 3, 2019
issues $20,000 shares of common stock for cas... | {"uploaded_via": "batch_uploader", "batch_upload": true, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creator": "DocBook XSL Stylesheets V1.79.1", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.... |
65084920-f650-4183-b7ca-ebb038977fda | [
-0.07962047308683395,
0.033348847180604935,
-0.0070868670009076595,
-0.029034355655312538,
-0.04666958749294281,
0.018780387938022614,
0.008027118630707264,
0.009054992347955704,
-0.0859944224357605,
0.029356559738516808,
0.0665547102689743,
0.025932420045137405,
-0.027815433219075203,
-0.... | Jan. 18, 2019
paid in full, with cash, for the equipment purchase on January 5
Jan. 20, 2019
paid $3,600 cash in salaries expense to employees
Jan. 23, 2019
received cash payment in full from the customer on the January 10 transaction
Jan. 27, 2019
provides $1,200 in services to a customer who asks to be billed ... | {"total_pages": 1055, "creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "produce... |
dfd11019-ad25-487c-8188-624dd0a7cd7c | [
-0.0835452675819397,
0.0717620849609375,
-0.03770727664232254,
0.06273827701807022,
0.027285203337669373,
0.010525286197662354,
-0.01853019930422306,
-0.019605809822678566,
-0.08946676552295685,
-0.009440379217267036,
0.07098998874425888,
0.03593257814645767,
0.030934341251850128,
-0.04583... | 4. Reviewing the company bank statement, Printing Plus discovers $140 of interest earned during the month
of January that was previously uncollected and unrecorded.
5. Employees earned $1,500 in salaries for the period of January 21–January 31 that had been previously
unpaid and unrecorded.
We now record the adjust... | {"producer": "Prince 11 (www.princexml.com)", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "batch_upload": true, "moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "up... |
275ab23f-7b75-42ad-80f0-92cb4a275fbf | [
-0.0031654846388846636,
0.08681560307741165,
0.04267369210720062,
0.0008905760478228331,
0.012020004913210869,
0.014172866009175777,
0.015576211735606194,
0.020286142826080322,
-0.013362055644392967,
0.010545682162046432,
0.04826553538441658,
-0.007408464327454567,
0.049014922231435776,
-0... | 229
Analysis:
• $100 of supplies were used during January. Supplies is an asset that is decreasing (credit).
• Supplies is a type of prepaid expense that, when used, becomes an expense. Supplies Expense would
increase (debit) for the $100 of supplies used during January.
Impact on the financial statements: Supplie... | {"producer": "Prince 11 (www.princexml.com)", "total_pages": 1055, "uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_type": ".pdf", "file_size_mb": 156.7, "creator": "DocBook XSL Stylesheets V1.79.1", "file_name": "FinancialAccounting-OP.pdf", "sour... |
c0ef12fe-f3a0-4670-999f-de3ad706dc8d | [
-0.024414947256445885,
0.08642227947711945,
0.048601798713207245,
-0.05249488353729248,
-0.03098123148083687,
-0.018448565155267715,
0.004528350196778774,
0.05257074534893036,
0.021857736632227898,
0.040580280125141144,
0.05420695245265961,
-0.014857861213386059,
0.09262735396623611,
-0.08... | Depreciation–Equipment account and the Depreciation Expense–Equipment account. While we are not
doing depreciation calculations here, you will come across more complex calculations in the future.
• Accumulated Depreciation–Equipment is a contra asset account (contrary to Equipment) and increases
(credit) for $75.
•... | {"file_type": ".pdf", "creationdate": "2019-04-24T10:32:54-05:00", "title": "Principles of Accounting, Volume 1: Financial Accounting", "batch_upload": true, "moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1"... |
938ffa67-18f4-4431-a3f1-2deec2b3ab0a | [
-0.09795396775007248,
0.033267173916101456,
0.013820817694067955,
-0.04459237679839134,
-0.04306082800030708,
-0.010587773285806179,
0.011301351711153984,
0.04609813913702965,
0.021295316517353058,
-0.011428619734942913,
0.07107358425855637,
0.031312212347984314,
0.024368323385715485,
-0.0... | income.
230
Chapter 4 The Adjustment Process
Transaction 15: Printing Plus performed $600 of services during January for the customer from the January 9
transaction.
Analysis:
• The customer from the January 9 transaction gave the company $4,000 in advanced payment for services.
By the end of January the company... | {"file_size_mb": 156.7, "file_name": "FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "modda... |
1c1155bf-782c-47bf-8213-bb65af1d7ed4 | [
-0.03228096291422844,
0.039149943739175797,
-0.08580420911312103,
-0.09037601947784424,
-0.06306485831737518,
-0.009456614032387733,
0.07030989974737167,
0.04277511313557625,
0.007554817479103804,
0.01801803894340992,
0.021917978301644325,
0.023918304592370987,
-0.003057326888665557,
-0.04... | and equity by $600 on the balance sheet. Service Revenue will increase overall revenue on the income
statement, which increases net income.
Transaction 16: Reviewing the company bank statement, Printing Plus discovers $140 of interest earned
during the month of January that was previously uncollected and unrecorded.... | {"file_type": ".pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "source": "downloads\\busi... |
0a071084-a6fe-4c76-9dbf-38e6cd7f584e | [
-0.01656322367489338,
0.07996000349521637,
0.01740843430161476,
-0.03417760506272316,
-0.04177544265985489,
-0.008324817754328251,
0.01777508482336998,
0.020334864035248756,
-0.03892367333173752,
0.021644238382577896,
-0.00036440830444917083,
-0.03712228685617447,
-0.005630527622997761,
-0... | increases (debit) for $140.
Impact on the financial statements: Interest Receivable is an asset account and will increase total assets by
$140 on the balance sheet. Interest Revenue will increase overall revenue on the income statement, which
increases net income.
This OpenStax book is available for free at http://... | {"producer": "Prince 11 (www.princexml.com)", "file_size_mb": 156.7, "upload_timestamp": "2026-02-07T07:23:08.167529", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\bu... |
139f7cbc-82e9-4485-9dd0-1ee013235572 | [
-0.071810282766819,
0.046628523617982864,
-0.0202811099588871,
-0.019406111910939217,
0.016269370913505554,
-0.013713083229959011,
0.07952728122472763,
0.04805922880768776,
0.03128739446401596,
0.0034465468488633633,
0.0438004769384861,
-0.052570562809705734,
0.031231660395860672,
-0.00782... | • Salaries Expense is an expense account that is increasing (debit) for $1,500.
• Since the company has not yet paid salaries for this time period, Printing Plus owes the employees this
money. This creates a liability for Printing Plus. Salaries Payable increases (credit) for $1,500.
Impact on the financial statemen... | {"file_type": ".pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "uploaded_via": "batch_uploader", "file_name": "FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creationdate": "2019... |
9a515b2b-a672-4ae0-b9e5-40e2a777f0e1 | [
-0.1384073793888092,
0.03956269845366478,
0.007479259744286537,
-0.015827108174562454,
-0.03932667896151543,
0.02749592997133732,
0.03949518874287605,
-0.020781196653842926,
-0.012771381996572018,
0.013181078247725964,
0.08477190881967545,
-0.02310246229171753,
0.01221687812358141,
-0.1043... | 1. The company recorded supplies usage for the month.
2. A customer paid in advance for services, and the company recorded revenue earned after providing
service to that customer.
3. The company recorded salaries that had been earned by employees but were previously unrecorded
and have not yet been paid.
Solution
... | {"source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creator": "DocBook XSL Stylesheets V1.79.1", "file_size_mb": 156.7, "total_pages": 1055, "file_type": ".pdf", "uploaded_via": "batch_uploader", "batch_upload":... |
424b83a2-420d-49b5-91c9-673dec2d57c7 | [
0.006007052026689053,
0.07240565121173859,
-0.032411348074674606,
0.015005904249846935,
-0.062335316091775894,
-0.0038725524209439754,
0.03239510953426361,
0.011523285880684853,
-0.053847748786211014,
0.06037408486008644,
0.01877492107450962,
-0.03822029009461403,
0.013085133396089077,
-0.... | incurred, added up since the last paycheck, onto the books for the first time during the adjusting
entry. Cash will be given to the employees at a later time.
L I N K T O L E A R N I N G
Several internet sites can provide additional information for you on adjusting entries. One very good site
where you can find... | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "batch_upload": true, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_type": ".pdf", "producer": "Prince 11 (www.princexml.com)", "total_pages": 1055, "file_name": "FinancialAccounting-OP.pdf", "upload_timestamp": ... |
ed15e641-af3e-430c-af2a-d84adc3b7582 | [
-0.041641078889369965,
0.08189043402671814,
0.0021647652611136436,
-0.008780972100794315,
-0.0210866779088974,
-0.03829997777938843,
0.019438089802861214,
0.03081541135907173,
-0.005565262399613857,
0.051998790353536606,
0.05119644105434418,
-0.02050403691828251,
0.009980163536965847,
-0.0... | Posting adjusting entries is no different than posting the regular daily journal entries. T-accounts will be the
visual representation for the Printing Plus general ledger.
Transaction 13: On January 31, Printing Plus took an inventory of its supplies and discovered that $100 of
supplies had been used during the mon... | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "uploaded_via": "batch_uploader", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "producer": "Prince 11 (www.princexml.com)", "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7, "moddate": "2020-08-05... |
137f73a0-6067-45a5-aa58-6b9996fd5a71 | [
-0.0378362275660038,
0.08208779990673065,
0.0196694303303957,
-0.05531313270330429,
-0.03831026330590248,
-0.05405247583985329,
0.02995559573173523,
0.03939409554004669,
0.026144078001379967,
0.04292277991771698,
0.08974470943212509,
0.0069120475091040134,
0.03547541797161102,
-0.046021737... | Transaction 14: The equipment purchased on January 5 depreciated $75 during the month of January.
Journal entry and T-accounts:
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
233
In the journal entry, Depreciation Expense–Equipment has a debit of $7... | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "producer": "Prince 11 (www.princexml.com)", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "creator": "DocBook XSL Stylesheets V1.79.1", "source": "d... |
234de841-bbe6-474b-981f-719655a69936 | [
-0.07957982271909714,
0.036033231765031815,
-0.02488461136817932,
-0.08476337790489197,
-0.04879600927233696,
-0.023096146062016487,
0.05691438168287277,
0.034343961626291275,
0.03027528151869774,
0.03596978634595871,
0.013563061133027077,
-0.029656460508704185,
-0.0013395902933552861,
-0.... | on the debit side (left side). You will notice there is already a credit balance in this account from the January 9
customer payment. The $600 debit is subtracted from the $4,000 credit to get a final balance of $3,400 (credit).
Service Revenue has a credit balance of $600. This is posted to the Service Revenue T-acc... | {"batch_upload": true, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "uploaded_via": "batch_uploader", "source_file": "downloads\\business\\accounting\\FinancialAccount... |
07f582de-7273-49a5-bba9-50f892a0d8aa | [
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0.03586161881685257,
-0.030412916094064713,
-0.07543740421533585,
-0.023365691304206848,
-0.... | Journal entry and T-accounts:
234
Chapter 4 The Adjustment Process
In the journal entry, Interest Receivable has a debit of $140. This is posted to the Interest Receivable T-account
on the debit side (left side). Interest Revenue has a credit balance of $140. This is posted to the Interest
Revenue T-account on the... | {"file_type": ".pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "upload_timestamp": "2026-02-07T07:23:08.167529", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "total_pages": ... |
687c7eb2-e2a3-42b2-a216-92e2b9342051 | [
-0.0467253178358078,
0.07798287272453308,
-0.04046995937824249,
-0.025028590112924576,
-0.009340651333332062,
-0.008103608153760433,
0.016499482095241547,
0.028041958808898926,
0.013679435476660728,
0.041940681636333466,
-0.010767655447125435,
-0.07725391536951065,
0.05591472238302231,
-0.... | Salaries Payable has a credit balance of $1,500. This is posted to the Salaries Payable T-account on the credit
side (right side).
T-accounts Summary
Once all adjusting journal entries have been posted to T-accounts, we can check to make sure the accounting
equation remains balanced. Following is a summary showing ... | {"file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "moddate": "2020-08-05T15:26:11-05:00", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "creator": "DocBook XSL Stylesheets V1.79.1", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d6... |
484aa0c9-eb53-4449-9569-bc0b8a66df95 | [
-0.092701755464077,
0.08136206865310669,
-0.016142694279551506,
-0.08657129853963852,
-0.017591413110494614,
-0.027431970462203026,
0.022898072376847267,
0.06849762797355652,
0.08319392800331116,
0.06825524568557739,
-0.011249544098973274,
-0.06513568013906479,
0.03417973220348358,
-0.0665... | equity side of the equation, we need to find the difference between debits and credits. Credits on the liabilities
and equity side of the equation total $35,640 (500 + 1,500 + 3,400 + 20,000 + 10,100 + 140). Debits on the
liabilities and equity side of the equation total $5,675 (100 + 100 + 5,100 + 300 + 75). The dif... | {"file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_type": ".pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "total_pages": 1055, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source_file... |
01c4226d-15f0-4eeb-b1a9-44c2e8f3e610 | [
0.013755652122199535,
0.06816724687814713,
-0.005197340622544289,
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-0.012873325496912003,
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-0.012783023528754711,
0.0034930186811834574,
0.027297405526041985,
0.014885172247886658,
0.012548678554594517,
0.024309929460287094,
0.025083603337407112,
... | for recording to avoid any account discrepancies and misreporting. To do this, companies can streamline
their general ledger and remove any unnecessary processes or accounts. Check out this article
“Encourage General Ledger Efficiency” from the Journal of Accountancy (https://openstax.org/l/
50JrnAcctArticl) that di... | {"uploaded_via": "batch_uploader", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_size_mb": 156.7, "creationdate": "2019-04-24T10:32:54-05:00", "file_type": ".pdf", "mod... |
66a55d85-7018-47c1-b56f-b115f185de7b | [
-0.03605969250202179,
0.07141043245792389,
-0.04699383303523064,
-0.04324060678482056,
0.012049424462020397,
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-0.00345703330822289,
0.05760924145579338,
0.08339332044124603,
0.037218086421489716,
0.04114916920661926,
-0.04675564914941788,
0.0029398694168776274,
-0.096... | which have nonzero balances. This trial balance is an important step in the accounting process because it
helps identify any computational errors throughout the first five steps in the cycle.
As with the unadjusted trial balance, transferring information from T-accounts to the adjusted trial balance
requires conside... | {"producer": "Prince 11 (www.princexml.com)", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "creationdate": "2019-04-24T10:32:54-05:00", "total_pages": 1055, "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_type": ".pdf", "upload_timestamp"... |
27a94ebd-0d6f-4f46-b905-63ca95642f19 | [
0.0009397923713549972,
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0.008117927238345146,
0.049394991248846054,
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0.056760597974061966,
0.014933930709958076,
-0.05568714067339897,
0.03306826204061508,
-0.... | balance are totaled to see if the figures in each column match. The final total in the debit column must be the
same dollar amount that is determined in the final credit column.
Let’s now take a look at the adjusted T-accounts and adjusted trial balance for Printing Plus to see how the
information is transferred fro... | {"file_name": "FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-05:00", "uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "total_pages": 1055, "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounti... |
cd00eb2a-9a4d-4f2e-be44-1c31211a8aec | [
-0.025326484814286232,
0.07706315070390701,
-0.022812461480498314,
-0.07422702014446259,
0.007550578098744154,
-0.005891481880098581,
0.031384099274873734,
0.06587841361761093,
0.008125094696879387,
0.04076371341943741,
0.00922443252056837,
-0.08773350715637207,
0.032286304980516434,
-0.09... | Supplies ($400), Supplies Expense ($100), Salaries Expense ($5,100), and Depreciation Expense–Equipment
($75) also have debit final balances in their adjusted T-accounts, so this information will be transferred to the
debit column on the adjusted trial balance. Accumulated Depreciation–Equipment ($75), Salaries Payab... | {"total_pages": 1055, "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_size_mb": 156.7, "uploaded_via": "batch_uploader", "upload_timestamp": "2026-02-07T07:23:08.167529", "producer": "Prince 11 (www.princexml.com... |
2b0529cf-375b-49b3-bc92-bcb5b14ccbf4 | [
-0.02698499709367752,
0.03934482857584953,
-0.03229120001196861,
-0.006008997559547424,
-0.027069592848420143,
0.07747816294431686,
-0.002780140610411763,
0.04527962952852249,
0.014060629531741142,
-0.025523046031594276,
0.052968014031648636,
0.03706785663962364,
-0.017091955989599228,
-0.... | After the adjusted trial balance is complete, we next prepare the company’s financial statements.
T H I N K I T T H R O U G H
Cash or Accrual Basis Accounting?
You are a new accountant at a salon. The salon had previously used cash basis accounting to prepare its
financial records but now considers switching to... | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "file_name": "FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creationdate": "2019-04-24T10:32:54-05:00", "file_type": ".pdf", "batch_upload": true, ... |
25aa2bc9-ee94-4424-9e47-9af2afda61b5 | [
0.019477596506476402,
0.06891509145498276,
0.035726167261600494,
-0.057555124163627625,
0.03793579712510109,
0.03257938101887703,
0.003909206949174404,
0.03924708068370819,
0.08455218374729156,
0.0368267297744751,
-0.0029661417938768864,
0.04315892606973648,
-0.02656775899231434,
-0.109191... | accrual basis?
C O N C E P T S I N P R A C T I C E
Why Is the Adjusted Trial Balance So Important?
As you have learned, the adjusted trial balance is an important step in the accounting process. But
outside of the accounting department, why is the adjusted trial balance important to the rest of the
This OpenSt... | {"batch_upload": true, "moddate": "2020-08-05T15:26:11-05:00", "file_name": "FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "file_type": ".pdf", "file_size_mb": 156.7, "producer": ... |
b7c2bad0-ffd2-433f-b42c-b433dbf4854b | [
0.03925398737192154,
0.1104685589671135,
0.0033794690389186144,
0.034055888652801514,
-0.022414280101656914,
0.03818674013018608,
0.005939919501543045,
0.02811070904135704,
0.057478561997413635,
0.02393702045083046,
-0.011346929706633091,
-0.0057123322039842606,
-0.02539295330643654,
-0.12... | decision-making for a business. Budgeting for employee salaries, revenue expectations, sales prices,
expense reductions, and long-term growth strategies are all impacted by what is provided on the
financial statements.
So if the company skips over creating an adjusted trial balance to make sure all accounts are bala... | {"producer": "Prince 11 (www.princexml.com)", "file_size_mb": 156.7, "uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:2... |
6f2be75e-a526-4a9d-9f55-42e294a08983 | [
0.00020790730195585638,
0.09764858335256577,
0.042972106486558914,
0.018118184059858322,
0.018878493458032608,
0.054478537291288376,
0.07878312468528748,
0.024291859939694405,
0.0485883466899395,
0.0012129879323765635,
0.060308050364255905,
-0.024580182507634163,
-0.004850432276725769,
-0.... | the statement of cash flows. These financial statements were introduced in Introduction to Financial
Statements and Statement of Cash Flows dedicates in-depth discussion to that statement.
To prepare the financial statements, a company will look at the adjusted trial balance for account information.
From this inform... | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "moddate": "2020-08-05T15:26:11-05:00", "creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader", "total_pages": 1055, "creator": "DocBook XSL Stylesheets V1.79.1", "file_hash": "89738e550d63820fbb3a833... |
9d9dc0a2-12a1-4ab7-9154-db49a0d2348a | [
-0.022834496572613716,
0.08961832523345947,
0.023436060175299644,
-0.00035501454840414226,
0.02433847077190876,
0.02127758227288723,
-0.021097522228956223,
-0.0007935432950034738,
0.00823444128036499,
0.014944745227694511,
0.06923361122608185,
-0.004274795297533274,
-0.002611584961414337,
... | Chapter 4 The Adjustment Process
Y O U R T U R N
Magnificent Adjusted Trial Balance
Go over the adjusted trial balance for Magnificent Landscaping Service. Identify which income statement
each account will go on: Balance Sheet, Statement of Retained Earnings, or Income Statement.
Solution
Balance Sheet: Cash, a... | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "total_pages": 1055, "producer": "Prince 11 (... |
bda73fbc-335b-4828-ac43-109d90ac8e78 | [
-0.020557496696710587,
0.09204388409852982,
0.0018455581739544868,
-0.004065430257469416,
-0.004567538388073444,
0.040497876703739166,
0.02380412258207798,
0.053261712193489075,
0.044955380260944366,
0.01750676892697811,
0.011046639643609524,
-0.005512998439371586,
-0.019259167835116386,
-... | preparing an income statement, revenues will always come before expenses in the presentation. For Printing
Plus, the following is its January 2019 Income Statement.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
241
Revenue and expense information i... | {"file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "total_pages": 1055, "file_type": ".pdf", "uploaded_via": "batch_uploader", "creator": "DocBook XSL Stylesheets V1.79.1"... |
1b1ca460-1ae6-4cea-9e57-77ab792e2edf | [
-0.05378704145550728,
0.07459630072116852,
0.02137036621570587,
0.011828281916677952,
0.007523371372371912,
-0.010015673004090786,
0.0046442849561572075,
0.0690067782998085,
0.07951848208904266,
-0.0207821074873209,
0.04365196451544762,
0.010925455018877983,
-0.05480645224452019,
-0.083665... | C O N C E P T S I N P R A C T I C E
The Importance of Accurate Financial Statements
Financial statements give a glimpse into the operations of a company, and investors, lenders, owners,
and others rely on the accuracy of this information when making future investing, lending, and growth
decisions. When one of t... | {"file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "creator": "DocBook XSL Stylesheets V1.79.1", "batch_upload": true, "file_size_mb": 156.7, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "creationdate": "20... |
b7545f75-254c-4c2c-a0de-476969691986 | [
0.022138578817248344,
0.13995350897312164,
-0.005657176952809095,
0.035680245608091354,
0.015559432096779346,
0.0470736138522625,
0.07276799529790878,
0.0059701865538954735,
0.09546394646167755,
-0.0278032124042511,
0.0669451504945755,
0.003824367420747876,
-0.011561693623661995,
-0.079883... | That is why it is so important to go through the detailed accounting process to reduce errors early on
and hopefully prevent misinformation from reaching financial statements. The business must have
strong internal controls and best practices to ensure the information is presented fairly.[3]
Statement of Retained Ear... | {"moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader", "file_type": ".pdf", "title": "Principles of Accounting, Volume 1: Financial Accounting", "upload_timestamp": "2026-02-07T... |
b9dbbb6d-e851-4232-a2c6-653647909bc6 | [
-0.01706160604953766,
0.0547894611954689,
-0.03182452917098999,
0.0017580786952748895,
0.017315302044153214,
0.0718645304441452,
0.034509580582380295,
0.03778653219342232,
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-0.0073030381463468075,
0.08851202577352524,
0.0266231968998909,
-0.03992222249507904,
-0.072384... | Printing Plus.
Net income information is taken from the income statement, and dividends information is taken from the
adjusted trial balance as follows.
James Jaillet. “Celadon under Criminal Investigation over Financial Statements.” Commercial Carrier Journal. July 25, 2018.
3
https://www.ccjdigital.com/200520-2/
... | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "total_pages": 1055, "moddate": "2020-08-05T15:26:11-05:00", "source": "downloads\\business... |
4af75580-92ca-41ce-a4fe-ee2690d65b34 | [
0.010892290621995926,
0.055660080164670944,
-0.03214341029524803,
-0.01626502349972725,
0.023535311222076416,
0.06380100548267365,
0.06494990736246109,
0.053349819034338,
0.030742250382900238,
-0.00519378948956728,
0.026092782616615295,
-0.017342498525977135,
0.0025855640415102243,
-0.1425... | from the sum of beginning retained earnings and net income to get the ending retained earnings balance of
244
Chapter 4 The Adjustment Process
$4,565 for January. This ending retained earnings balance is transferred to the balance sheet.
L I N K T O L E A R N I N G
Concepts Statements give the Financial Accoun... | {"upload_timestamp": "2026-02-07T07:23:08.167529", "batch_upload": true, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "producer": "Prince 11 (www.princexml.com)", "total_pages": 1055, "file_size_mb": 156.7, "file_name": "FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheet... |
0cdae6e1-78c0-4484-8181-e627ed23e84e | [
-0.008256764151155949,
0.09887769818305969,
0.011486904695630074,
-0.05035774037241936,
-0.029226306825876236,
-0.007969447411596775,
0.030588841065764427,
0.046474769711494446,
0.05121595039963722,
0.038219090551137924,
0.039247918874025345,
0.002426313003525138,
0.08878453075885773,
-0.1... | date. Remember that the balance sheet represents the accounting equation, where assets equal liabilities plus
stockholders’ equity. The following is the Balance Sheet for Printing Plus.
Ending retained earnings information is taken from the statement of retained earnings, and asset, liability, and
common stock infor... | {"uploaded_via": "batch_uploader", "batch_upload": true, "file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_type": ".pdf", "producer": "Prince 11 (www.princexml.com)", "total_pages": 1055, "title": "Principles of Accounting, Volume 1: Financial Accounting", "source": "download... |
422c0467-699d-4a87-b281-84aef5d8d118 | [
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0.013429275713860989,
-0.048131346702575684,
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0.028887182474136353,
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0.013859529048204422,
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0.00291152810677886,
-0.008801429532468319,
-0.029318323358893394,
-0.06860648095607758,
-0.... | shown on the balance sheet, because total assets equal $29,965 as do the total liabilities and stockholders’
equity.
There is a worksheet approach a company may use to make sure end-of-period adjustments translate to the
correct financial statements.
I F R S C O N N E C T I O N
Financial Statements
Both US-base... | {"batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "file_name": "FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "uploaded_via": "batch_uploader", "total_pages": 1055, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.... |
cdf12e37-2de9-4e91-966a-0903baf5eb4d | [
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-0.0035996539518237114,
-0.005893766414374113,
-0.04463180899620056,
... | Statement, such as revenues, expenses, taxes, and net income, to name a few, publicly traded companies
in the United States have further requirements placed by the SEC on the reporting of financial
statements. For example, IFRS-based financial statements are only required to report the current period
of information ... | {"file_size_mb": 156.7, "producer": "Prince 11 (www.princexml.com)", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "creationdate": "2019-04-24T10:32:54-05:00", "batch_upload": true, "creator": "DocBook XSL Stylesheets V1.79.1", "upload_timestamp": "2026-02-... |
b8fdc43c-f1e7-42db-bec2-77b6dda67361 | [
-0.06423403322696686,
0.0035364862997084856,
-0.06984158605337143,
-0.07706980407238007,
0.03041466884315014,
0.008578279986977577,
0.06351889669895172,
-0.03664514794945717,
0.11808964610099792,
-0.024834875017404556,
0.04625197872519493,
-0.06359945982694626,
-0.05562923103570938,
0.0290... | requires that companies present their Balance Sheet information in liquidity order, which means current
assets listed first with cash being the first account presented, as it is a company’s most liquid account.
Liquidity refers to how easily an item can be converted to cash. IFRS requires that accounts be classified
... | {"file_name": "FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creator": "DocBoo... |
6fca9b77-6592-4956-a2ef-bd76ff1173c1 | [
-0.02224970981478691,
0.03907611221075058,
-0.0525653101503849,
-0.052551448345184326,
-0.0015864684246480465,
0.018759524449706078,
-0.037153150886297226,
0.025196608155965805,
0.13489072024822235,
0.006857030093669891,
0.04163092374801636,
-0.0014092365745455027,
-0.05082893744111061,
-0... | company, the lack of a required format means that a company can present noncurrent assets first,
followed by current assets. The accounts of a Balance Sheet using IFRS might appear as shown here.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
247
Re... | {"creator": "DocBook XSL Stylesheets V1.79.1", "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "moddate": "2020-08-05T15:26:11-0... |
21d76146-5a03-4a14-9099-36ae183bb82d | [
-0.03241567686200142,
0.06587446480989456,
-0.09922963380813599,
-0.06343837082386017,
0.008786878548562527,
0.07118968665599823,
-0.03654094040393829,
0.039334915578365326,
0.01732616499066353,
0.009954803623259068,
0.028315778821706772,
-0.007851187139749527,
-0.051089879125356674,
-0.09... | it is recorded.
Ten-Column Worksheets
The 10-column worksheet is an all-in-one spreadsheet showing the transition of account information from
the trial balance through the financial statements. Accountants use the 10-column worksheet to help calculate
end-of-period adjustments. Using a 10-column worksheet is an opt... | {"moddate": "2020-08-05T15:26:11-05:00", "total_pages": 1055, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creator": "DocBook XSL Stylesheets V1.79.1", "source": "downloads\\business\\accounting\\FinancialAccountin... |
958d5a6c-319c-45cc-9074-cd85cbb296b0 | [
0.013464704155921936,
0.0583723820745945,
-0.08285500109195709,
-0.062407493591308594,
-0.0097568454220891,
0.032031770795583725,
-0.036817774176597595,
0.07640431076288223,
-0.016258442774415016,
0.05974990874528885,
0.022110026329755783,
-0.05519154667854309,
-0.003092745319008827,
-0.10... | trial balance columns of the 10-column worksheet.
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
249
The trial balance information for Printing Plus is shown previously. Notice that the debit and credit columns
both equal $34,000. If we go back and ... | {"file_type": ".pdf", "total_pages": 1055, "creationdate": "2019-04-24T10:32:54-05:00", "upload_timestamp": "2026-02-07T07:23:08.167529", "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_name": "FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "producer": "Prince 11 (... |
28946ac4-ff48-4364-9da7-518e5d8dcdb2 | [
-0.028396233916282654,
0.042842742055654526,
-0.03564203903079033,
-0.09119678288698196,
-0.038502827286720276,
-0.00010368457151344046,
-0.011541967280209064,
0.07446137070655823,
-0.0012299115769565105,
0.05151183530688286,
0.026170194149017334,
-0.07639186084270477,
0.026548322290182114,
... | 251
The adjustments total of $2,415 balances in the debit and credit columns.
The next step is to record information in the adjusted trial balance columns.
252
Chapter 4 The Adjustment Process
To get the numbers in these columns, you take the number in the trial balance column and add or subtract
any number found... | {"file_type": ".pdf", "total_pages": 1055, "moddate": "2020-08-05T15:26:11-05:00", "file_size_mb": 156.7, "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "producer": "Prince 11 (www.princexml.com)", "upload_ti... |
6a64d0f7-1dde-4020-896e-336d88670c23 | [
-0.0375872477889061,
0.012059221975505352,
-0.058628618717193604,
-0.0946449264883995,
-0.020296795293688774,
0.029126601293683052,
-0.006305370479822159,
0.045370008796453476,
-0.02426578290760517,
0.024418650195002556,
0.016147825866937637,
-0.07383871078491211,
0.005226091481745243,
-0.... | the adjustment column. Remember that adding debits and credits is like adding positive and negative
numbers. This means the $600 debit is subtracted from the $4,000 credit to get a credit balance of $3,400 that
is translated to the adjusted trial balance column.
Service Revenue had a $9,500 credit balance in the tri... | {"creationdate": "2019-04-24T10:32:54-05:00", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "producer": "Prince 11 (www.princexml.com)", "creator": "DocBook XSL Stylesheets V1.79.1", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-0... |
efd7c04b-23d8-4840-9f6d-831174de7ff4 | [
-0.016045747324824333,
0.0423155277967453,
-0.023001480847597122,
-0.061247289180755615,
0.0111849345266819,
0.019263582304120064,
-0.03122692182660103,
0.005612955894321203,
-0.033931415528059006,
0.01888282783329487,
0.018394500017166138,
-0.03475237265229225,
0.007873877882957458,
-0.11... | 253
credits to make sure they are equal. In the case of Printing Plus, the balances equal $35,715. If you check the
adjusted trial balance for Printing Plus, you will see the same equal balance is present.
Next you will take all of the figures in the adjusted trial balance columns and carry them over to either the
... | {"file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "uploaded_via": "batch_uploader", "batch_upload": true, "producer": "Prince 11 (www.princexml.com)", "title": "Principles of Accounting, Volume 1: Financial Accounting", "tota... |
1688a028-fea6-440f-8d3d-06c2d9e26669 | [
-0.034177012741565704,
0.020919708535075188,
-0.014031263068318367,
-0.08494734019041061,
0.003157601924613118,
-0.001756939571350813,
0.0161477942019701,
0.02510320395231247,
0.02154468558728695,
-0.018014196306467056,
-0.0514802448451519,
-0.11242268979549408,
0.002476971596479416,
-0.08... | 255
Solution
Every other account title has been highlighted to help your eyes focus better while checking your work.
Looking at the income statement columns, we see that all revenue and expense accounts are listed in either
the debit or credit column. This is a reminder that the income statement itself does not org... | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "total_pages": 1055, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "title": "Principles of Accounting, Volume ... |
13164317-1720-41e3-80bb-289042e365e8 | [
0.030943667516112328,
0.05747233331203461,
-0.0076302275992929935,
-0.07457642257213593,
0.008972888812422752,
0.02285320870578289,
0.0025427956134080887,
0.07717309147119522,
-0.008830993436276913,
0.02335425652563572,
-0.006030413322150707,
-0.07025530934333801,
0.004537050146609545,
-0.... | difference between the two numbers, that difference is the amount of net income, or net loss, the company
has earned.
In the Printing Plus case, the credit side is the higher figure at $10,240. The credit side represents revenues.
This means revenues exceed expenses, thus giving the company a net income. If the debi... | {"upload_timestamp": "2026-02-07T07:23:08.167529", "creator": "DocBook XSL Stylesheets V1.79.1", "batch_upload": true, "title": "Principles of Accounting, Volume 1: Financial Accounting", "file_name": "FinancialAccounting-OP.pdf", "total_pages": 1055, "producer": "Prince 11 (www.princexml.com)", "file_size_mb": 156.7, ... |
5c443b22-2c2c-41c2-b34c-7a9ec2b7614e | [
-0.009294881485402584,
0.008282782509922981,
-0.01905161142349243,
-0.0853973850607872,
-0.011705045588314533,
0.010994253680109978,
0.008112242445349693,
0.02847527153789997,
-0.007383592892438173,
0.027267932891845703,
-0.018641194328665733,
-0.1084132045507431,
0.03354981914162636,
-0.0... | This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
257
of $10,240. This balances the two columns for the income statement. If you review the income statement, you
see that net income is in fact $4,665.
258
Chapter 4 The Adjustment Process
We now consi... | {"moddate": "2020-08-05T15:26:11-05:00", "creationdate": "2019-04-24T10:32:54-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "file_name": "FinancialAccounting-OP.pdf", "batch_upload": true, "uploaded_... |
ab8b8823-5bd5-4c26-b035-5b1083a6c9bc | [
-0.04711972549557686,
0.05617513135075569,
-0.04847073554992676,
-0.01637127995491028,
0.07010319828987122,
0.0541740283370018,
-0.007187433075159788,
0.010629195719957352,
0.06443411856889725,
0.006913656368851662,
0.06999999284744263,
-0.044509291648864746,
-0.021486202254891396,
-0.0955... | side. In this case we added a debit of $4,665 to the income statement column. This means we must add a
credit of $4,665 to the balance sheet column. Once we add the $4,665 to the credit side of the balance sheet
column, the two columns equal $30,140.
You may notice that dividends are included in our 10-column worksh... | {"producer": "Prince 11 (www.princexml.com)", "creator": "DocBook XSL Stylesheets V1.79.1", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "uploaded_via": "batch_uploader", "creationdate": "2019-04-24T10:32:54-05:00", "moddate": "2020-08-05T15:26:11-05:00", "total_pages": 1055, "batch_upl... |
5164bef4-a625-41b8-9372-0bc05a1537c1 | [
-0.051577214151620865,
0.04349830001592636,
-0.10462986677885056,
-0.021654583513736725,
0.03452812135219574,
0.05324864014983177,
0.0057358089834451675,
-0.008686383254826069,
0.038932740688323975,
-0.007472493220120668,
0.11147941648960114,
-0.005351613741368055,
-0.04614035040140152,
-0... | worksheet for Printing Plus, you will notice there is no retained earnings account. That is because they just
started business this month and have no beginning retained earnings balance.
If you look in the balance sheet columns, we do have the new, up-to-date retained earnings, but it is spread
out through two numbe... | {"creationdate": "2019-04-24T10:32:54-05:00", "uploaded_via": "batch_uploader", "file_name": "FinancialAccounting-OP.pdf", "batch_upload": true, "moddate": "2020-08-05T15:26:11-05:00", "file_size_mb": 156.7, "file_type": ".pdf", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "producer": "Princ... |
9bf6a5ba-8305-4ad3-97b1-f34739d5bf8f | [
-0.02963315322995186,
0.011458518914878368,
-0.003796767443418503,
-0.014786775223910809,
-0.016087276861071587,
0.0514446422457695,
-0.023356713354587555,
0.07586437463760376,
0.061489492654800415,
-0.02707604318857193,
-0.01006550993770361,
0.01265192124992609,
0.003152147401124239,
-0.1... | balance of $30,140.
The balance sheet is classifying the accounts by type of accounts, assets and contra assets, liabilities, and
equity. This leads to a final balance of $29,965. Even though they are the same numbers in the accounts, the
totals on the worksheet and the totals on the balance sheet will be different ... | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_name": "FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167... |
90f78818-83fc-466f-8ec8-d06c23b8fe3d | [
0.015311622060835361,
0.043499451130628586,
0.01107446663081646,
0.007012162357568741,
0.026181528344750404,
0.07451880723237991,
-0.02091071754693985,
0.05223333463072777,
-0.009123670868575573,
-0.0050810896791517735,
0.00874959584325552,
-0.04191478714346886,
0.0026722808834165335,
-0.1... | Y O U R T U R N
Frank’s Net Income and Loss
What amount of net income/loss does Frank have?
260
Chapter 4 The Adjustment Process
Solution
This OpenStax book is available for free at http://cnx.org/content/col25448/1.4
Chapter 4 The Adjustment Process
261
In Completing the Accounting Cycle, we continue our di... | {"upload_timestamp": "2026-02-07T07:23:08.167529", "producer": "Prince 11 (www.princexml.com)", "total_pages": 1055, "batch_upload": true, "file_size_mb": 156.7, "moddate": "2020-08-05T15:26:11-05:00", "creator": "DocBook XSL Stylesheets V1.79.1", "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf",... |
c62d082a-7f9c-4ae1-8239-fd6057f24f31 | [
-0.015416517853736877,
0.03410530835390091,
-0.04901107773184776,
-0.007517787627875805,
-0.040443845093250275,
0.01668086089193821,
0.0021054870449006557,
0.02383577823638916,
0.038621772080659866,
0.02137608267366886,
0.04234430938959122,
-0.04356379434466362,
0.012241320684552193,
-0.09... | month, quarter, half-year, or full year
accrual
type of adjusting entry that accumulates during a period, where an amount was previously
unrecorded
accrued expense
expense incurred in a period but not yet recorded, and no money has been paid
accrued revenue
revenue earned in a period but not yet recorded, and no... | {"source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "file_size_mb": 156.7, "total_pages": 1055, "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "title": "Principles of Accounting, Volume 1: Financial Accounting", "moddate": "2020-08-05T15:26:11-05:00", "uploaded_vi... |
0414f873-9981-4acd-b022-26ccf682b4b4 | [
-0.04433641582727432,
0.026439202949404716,
-0.05894897133111954,
-0.020060110837221146,
-0.01510554738342762,
0.06780412048101425,
0.05018574371933937,
-0.007150533143430948,
0.024286989122629166,
0.0336795449256897,
0.058187734335660934,
-0.03770887851715088,
-0.001690540462732315,
-0.01... | calendar year
reports financial data from January 1 to December 31 of a specific year
contra account
account paired with another account type that has an opposite normal balance to the paired
account; reduces or increases the balance in the paired account at the end of a period
deferral
prepaid expense and revenu... | {"title": "Principles of Accounting, Volume 1: Financial Accounting", "uploaded_via": "batch_uploader", "creator": "DocBook XSL Stylesheets V1.79.1", "file_name": "FinancialAccounting-OP.pdf", "file_hash": "89738e550d63820fbb3a833d14ab04029664bcb14dc631bb8a45f0af74d2d6b9", "source": "downloads\\business\\accounting\\Fi... |
e3879ee1-0b46-4d0d-a23c-8cf40b67deac | [
-0.0208674855530262,
0.03705653175711632,
-0.03667226806282997,
-0.032093971967697144,
0.003327500307932496,
0.05404062569141388,
0.09005952626466751,
0.01331005897372961,
0.06149463355541229,
0.043020207434892654,
0.05405637249350548,
-0.038472775369882584,
-0.03537407144904137,
-0.021089... | tax basis accounting
establishes the tax effects of transactions in determining the tax liability of an
organization
useful life
time period over which an asset cost is allocated
Summary
4.1 Explain the Concepts and Guidelines Affecting Adjusting Entries
• The next three steps in the accounting cycle are adjusti... | {"moddate": "2020-08-05T15:26:11-05:00", "source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "batch_upload": true, "file_size_mb": 156.7, "total_pages": 1055, "creator": "DocBook XSL Stylesheets V1.79.1", "creationdate": "2019-04-24T10:32:54-05:00", "source": "downloads\\business\\accounting\\... |
0dae3eb4-f17d-4d6a-8636-4e8a06a03087 | [
-0.023846406489610672,
0.0484006442129612,
-0.0013195491628721356,
0.005766784772276878,
-0.017308738082647324,
0.006387585308402777,
-0.03899794816970825,
-0.016494793817400932,
0.011722995899617672,
0.0018246647669002414,
0.043184034526348114,
0.0034851902164518833,
-0.042596254497766495,
... | and expenses until a cash event occurs.
• Companies need timely and consistent financial information presented for users to consider in their
decision-making. Accounting periods help companies do this by breaking down information into months,
quarters, half-years, and full years.
• A calendar year considers financi... | {"upload_timestamp": "2026-02-07T07:23:08.167529", "producer": "Prince 11 (www.princexml.com)", "title": "Principles of Accounting, Volume 1: Financial Accounting", "creationdate": "2019-04-24T10:32:54-05:00", "file_size_mb": 156.7, "source": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "total_pages":... |
f0bf4315-83b7-4135-961a-28d30a56b94b | [
-0.0490732416510582,
0.07983842492103577,
0.0015065184561535716,
-0.016490979120135307,
-0.017607292160391808,
0.04600083455443382,
0.023775335401296616,
0.008645417168736458,
0.026727614924311638,
0.0646606981754303,
0.02626388520002365,
-0.0016085042152553797,
0.036096472293138504,
-0.13... | 4.2 Discuss the Adjustment Process and Illustrate Common Types of Adjusting Entries
•
Incorrect balances: Incorrect balances on the unadjusted trial balance occur because not every
transaction produces an original source document that will alert the bookkeeper it is time to make an
entry. It is not that the account... | {"source_file": "downloads\\business\\accounting\\FinancialAccounting-OP.pdf", "upload_timestamp": "2026-02-07T07:23:08.167529", "file_size_mb": 156.7, "producer": "Prince 11 (www.princexml.com)", "file_name": "FinancialAccounting-OP.pdf", "creator": "DocBook XSL Stylesheets V1.79.1", "file_type": ".pdf", "source": "do... |
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