Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year. The business activity for each type of adjusting entry is explained as follows: Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period To Indicate: The adjustments needed at the end of the accounting period

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Chapter 3, Problem 8CDQ

To determine

Concept Introduction:

Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.

The business activity for each type of adjusting entry is explained as follows:

Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period

To Indicate:

The adjustments needed at the end of the accounting period

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