• Home
  • Resources
  • Services
  • Testimonial
  • Blog
EDWIN CANALES BOOKKEEPING SERVICES
  • Home
  • Resources
  • Services
  • Testimonial
  • Blog

Bookkeeping & Accounting
​Blog

The Adjustment Process in Accounting

8/14/2018

0 Comments

 
Picture
When the accounting period ends, some of the account balances in the ledger are reported in the financial statement without change. But there are accounts that required to be updated monthly, quarterly, or yearly depending on the nature of the transaction.

There four basic accounts that are require adjustment with journal entries:

1. Prepaid Expense: are advance payment of future expenses and are recorded as assets when cash is paid. It becomes expense over time or during normal operation. 

2. Unearned Revenue: are advance receipt of future revenues and are recorded as liabilities when cash is received. Unearned revenue becomes earned revenue over time or during normal operations.

3. Accrued Revenue: are unrecorded revenues that have been earned and for which cash has yet to be received.

4. Accrued Expense: are unrecorded expenses that have been incurred and for which cash has yet to be paid.

Updating the account will keep the financial reports current with revenue and expenses during statement review.

A good way to make sure that all of the adjustment are done is by using the memorizing feature in QuickBooks. This helps make the process faster for adjustment and remind you of all the journal entries that need to be completed.
0 Comments



Leave a Reply.

    Blog Info:

    Blogs are about learning basic accounting, accounting formula, tips and advice, and investment concepts and terms.


    Categories

    All
    Accounting Formulas
    Accounting Tips And Advice
    Business 101
    Finance And Investment
    Learning Accounting Concepts

    Archives

    July 2020
    May 2020
    April 2020
    March 2020
    July 2019
    June 2019
    May 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    December 2017
    November 2017
    October 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017

    RSS Feed

Photos used under Creative Commons from wuestenigel, Joe The Goat Farmer, David Reber's Hammer Photography, CreditDebitPro, wuestenigel, mytradingskills, scootergenius02, Toolstotal, michel Kalff, Joe The Goat Farmer, CreditDebitPro, davidstewartgets, Nguyen Vu Hung (vuhung), bhanakam, wuestenigel, investmentzen
  • Home
  • Resources
  • Services
  • Testimonial
  • Blog