Adjusting Entries : Adjusting entries are passed at the end of the accounting period to maintain the accounts on accrual basis. These entries are passed in order to adjust the amounts of incomes and expenses in the accounting period in which they are actually earned and incurred respectively. Reversing Entry: The reversing entries are the contra entries of the original journal entries. These are generally made at the beginning of reporting period. To explain: The difference between adjusting entry and reversing entry and the need to prepare reversing entries.

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Chapter 4, Problem 10Q

To determine

Adjusting Entries: Adjusting entries are passed at the end of the accounting period to maintain the accounts on accrual basis. These entries are passed in order to adjust the amounts of incomes and expenses in the accounting period in which they are actually earned and incurred respectively.

Reversing Entry: The reversing entries are the contra entries of the original journal entries. These are generally made at the beginning of reporting period.

To explain: The difference between adjusting entry and reversing entry and the need to prepare reversing entries.

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