Chapter 4, Problem 4.2BP

(a)

To determine

Adjusting entries:

An adjusting entry is prepared when the trial balance is not up-to-date, and complete, and they are usually prepared at the end of the accounting period. This adjusting entry is essential for preparing the financial statements of the business.

T-Accounts:

T-accounts are referred as T-account because its format represents the letter “T”. The T-accounts consists of the following:

• The title of accounts.
• The debit side (Dr) and,
• The credit side (Cr).

Adjusted trial balance:

The unadjusted trial balance is the summary of all the ledger accounts that appears on the ledger accounts before making adjusting journal entries.

To prepare: The adjusting entries of Company O for the month of May.

(b)

To determine

To post: The adjusting entries to the ledger accounts.

(3)

To determine

To prepare: An adjusted trial balance of Company O at May 3, 2014.