Explanation Adjusting entries : Adjusting entries refers to the entries that are made at the end of an accounting period in accordance with revenue recognition principle, and expenses recognition principle. All adjusting entries affect at least one income statement account (revenue or expense), and one balance sheet account (asset or liability). Rules of Debit and Credit: Following rules are followed for debiting and crediting different accounts while they occur in business transactions: • Debit , all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities. • Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses. • In this case, Company PR incurred the salaries expense but cash is not yet paid. So, the necessary adjusting entry that the Company PR should record to recognize the accrued expense is as follows: • Date Description Post. Ref Debit ($) Credit ($) Salaries expense (1) 23,000 Salaries payable 23,000 (To record the salaries expense incurred at the end of the Friday) Table (1) Working note: Calculate the value of salaries expense at end of the Friday Salaries expense = [ ( Value of weekly salaries No

Financial and Managerial Accounting - Workingpapers

15th Edition

ISBN: 9781337912112

Author: WARREN

Publisher: CENGAGE L

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Journalize the adjusting transactions as given in the books of Company PR.

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Financial and Managerial Accounting - Workingpapers

Ch. 3 - How are revenues and expenses reported on the...Ch. 3 - Is the matching concept related to (A) the cash...Ch. 3 - Why are adjusting entries needed at the end of an...Ch. 3 - What is the difference between adjusting entries...Ch. 3 - Identify the four different categories of...Ch. 3 - If the effect of the debit portion of an adjusting...Ch. 3 - If the effect of the credit portion of an...Ch. 3 - Prob. 8DQ Ch. 3 - Prob. 9DQ Ch. 3 - (A) Explain the purpose of the two accounts:...

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Journalize the adjusting transactions as given in the books of Company PR.

Solution Summary: The author explains the rules of debiting and crediting different accounts while they occur in business transactions.

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