Adjusting Entries: The journal entries to recognize the revenue earned and expenses incurred during a specified accounting period is called adjusting entries. The adjusting entries are basically classified into two categories; deferral and accrual. The trial without adjusting the revenue and expenses recognized during the period is called an unadjusted trial balance and the trial after posting the adjusting entries is referred as adjusted trial balance. To determine: 1. Journalize the adjusting entries on December 31. 2. Open the ledger accounts with the unadjusted balances and post the adjusting entries to the ledger accounts. 3. Prepare the adjusted trial balance. 4. Assuming the adjusted trial balance has total debits equal to total credits, does this mean that the adjusting entries have been recorded correctly? Explain.

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Chapter 3, Problem P3.42BPGB

To determine

Adjusting Entries:

The journal entries to recognize the revenue earned and expenses incurred during a specified accounting period is called adjusting entries. The adjusting entries are basically classified into two categories; deferral and accrual. The trial without adjusting the revenue and expenses recognized during the period is called an unadjusted trial balance and the trial after posting the adjusting entries is referred as adjusted trial balance.

To determine:

1. Journalize the adjusting entries on December 31.

2. Open the ledger accounts with the unadjusted balances and post the adjusting entries to the ledger accounts.

3. Prepare the adjusted trial balance.

4. Assuming the adjusted trial balance has total debits equal to total credits, does this mean that the adjusting entries have been recorded correctly? Explain.

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