Concept explainers
Adjusting entries are those entries which are made at the end of the accounting period, to record the revenues in the period of which they have been earned and to record the expenses in the period of which have been incurred, as well as to update all the balances of assets and liabilities accounts on the
Accounting rules for journal entries:
- To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.
- To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.
To indicate: The item incorrectly stated because of the error on the balance sheet and income statement.

Want to see the full answer?
Check out a sample textbook solution
Chapter 3 Solutions
Bundle: Accounting, Chapters 1-13, 26th + Working Papers, Chapters 1-17 For Warren/reeve/duchac's Accounting, 26th And Financial Accounting, 14th + ... For Warren/reeve/duchac's Accounting, 26th
- Give me correct answerarrow_forwardHi expert please give me answer general accounting questionarrow_forwardPluto Flyers, Inc., has balance sheet equity of $6.2 million. At the same time, the income statement shows net income of $865,000. The company company paid dividends of $472,500 and has 120,000 shares of stock outstanding. If the benchmark PE ratio is 20, what is the target stock price in one year? Answer: $144.20arrow_forward
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
