Adjusting Entries Adjusting entries indicates those entries, which are passed in the books of accounts at the end of one accounting period. These entries are passed in the books of accounts as per the revenue recognition principle and the expenses recognition principle to adjust the revenue, and the expenses of a business in the period of their occurrence. Rule of Debit and Credit: Debit - Increase in all assets, expenses & dividends, and decrease in all liabilities and stockholders’ equity. Credit - Increase in all liabilities and stockholders’ equity, and decrease in all assets & expenses. To record: The adjusting entry for supplies.
Adjusting Entries Adjusting entries indicates those entries, which are passed in the books of accounts at the end of one accounting period. These entries are passed in the books of accounts as per the revenue recognition principle and the expenses recognition principle to adjust the revenue, and the expenses of a business in the period of their occurrence. Rule of Debit and Credit: Debit - Increase in all assets, expenses & dividends, and decrease in all liabilities and stockholders’ equity. Credit - Increase in all liabilities and stockholders’ equity, and decrease in all assets & expenses. To record: The adjusting entry for supplies.
Solution Summary: The author explains that adjusting entries are passed in the books of accounts at the end of one accounting period.
Adjusting entries indicates those entries, which are passed in the books of accounts at the end of one accounting period. These entries are passed in the books of accounts as per the revenue recognition principle and the expenses recognition principle to adjust the revenue, and the expenses of a business in the period of their occurrence.
Rule of Debit and Credit:
Debit - Increase in all assets, expenses & dividends, and decrease in all liabilities and stockholders’ equity.
Credit - Increase in all liabilities and stockholders’ equity, and decrease in all assets & expenses.
A standard costing system:
a. is employed with an existing job order costing or process costing
system and is not a full cost accounting system in itself.
b. is a system in which all costs affecting the three inventory accounts
and the Cost of Goods Sold account are stated in terms of actual costs
incurred.
c. depends on actual costs rather than planned costs.
d. is used by management for cost planning, but not for cost control
purposes.
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