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 statementsof the business. Types of adjusting entries: There are two types of adjusting entries, they are: Accruals and, Deferrals. These can be further classified into two types as follows: 1. Accruals – Prepaid expenses, and unearned revenue. 2. Deferrals – Accrued revenues, and accrued expenses. To indicate: The types of adjustments.

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Chapter 4, Problem 4.8E

(1)

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 statementsof the business.

Types of adjusting entries:

There are two types of adjusting entries, they are:

Accruals and,

Deferrals.

These can be further classified into two types as follows:

1. Accruals – Prepaid expenses, and unearned revenue.

2. Deferrals – Accrued revenues, and accrued expenses.

To indicate: The types of adjustments.

(2)

To determine

To indicate: The status of accounts before adjustments.

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