Adjustment entries : The adjustment entries are prepared in the second phase of journal after the end of trial balance . The main purpose is to adjust revenues and costs to the accounting time frame where they actually occurred. After these entries are prepared, they were posted to the general ledger. They were prepared for achieving perfect demonstration of assets, investor’s equity, and liabilities. Reversing entries: An entry created or recorded to reverse the entry which is already recorded in the books of accounts is termed as reversing entries. The reversing entry occurs at the commencement of the reporting period. This kind of entries are used in the accounting at the time of accumulation of income and expense in the foregoing time frame. The reversing entries are made to abridge the recording of definite transactions which transpire in the future period. To prepare: To prepare the adjusting and reversing entries of the DB Company.

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Chapter 3, Problem 20E

To determine

Adjustment entries: The adjustment entries are prepared in the second phase of journal after the end of trial balance. The main purpose is to adjust revenues and costs to the accounting time frame where they actually occurred. After these entries are prepared, they were posted to the general ledger. They were prepared for achieving perfect demonstration of assets, investor’s equity, and liabilities.

Reversing entries: An entry created or recorded to reverse the entry which is already recorded in the books of accounts is termed as reversing entries. The reversing entry occurs at the commencement of the reporting period. This kind of entries are used in the accounting at the time of accumulation of income and expense in the foregoing time frame. The reversing entries are made to abridge the recording of definite transactions which transpire in the future period.

To prepare: To prepare the adjusting and reversing entries of the DB Company.

To determine

To prepare: To prepare the reversing entries of the DB Company.

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