Concept explainers
Adjusting entries are made at the end of the year to adjust the financial position of the enterprise according to accrual basis of accounting.
Accounting rules regarding journal entries:
Journal Entries:
It is a book of original entry. It records and summarizes financial transaction of an entity in chronological manner, generally according to dual aspect of accounting.
Adjusted
It is a statement which contains balances of all account after all the adjusting entries has been made.
Income Statement:
It is a financial statement which shows the
It is a financial statement which shows the amount of profit retained by the company for their future unforeseen events.
Closing Entries:
These entries is made for those item whose balance need to be zero for next accounting period otherwise data of two accounting periods will get mix with each other.
Balance sheet shows the financial position of a firm. It consists of asset, liabilities and the
1.
To prepare: Ledger account, according to balance column format.
2.
To prepare: Journal entry and post them to ledger account.
3.
To prepare: An unadjusted trial balance.
4.
a.
To prepare: Adjusting entry.
b.
To prepare: Adjusting entry.
c.
To prepare: Adjusting entry.
d.
To prepare: Adjusting entry.
e.
To prepare: Adjusting entry.
5.
To prepare: An adjusted trial balance, income statement, statement of retained earnings and balance sheet.
6.
To prepare: Closing entries.
7.
To prepare: A post closing trial balance.
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