An adjusting entry in accounting is a journal entry made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Here is an example of an adjusting entry:

Suppose a company has a $1000 insurance expense that is paid at the beginning of the year. This is initially recorded as a prepaid expense. However, as the year progresses, this prepaid expense becomes an actual expense.

At the end of each month, an adjusting entry will be made to record the insurance expense for that month. The journal entry will be:

Debit Insurance Expense $83.33 (1000/12)
Credit Prepaid Insurance $83.33

This adjusting entry reduces the balance in the Prepaid Insurance account and increases the balance in the Insurance Expense account. This process is repeated each month until the end of the year, when the balance in the Prepaid Insurance account will be $0 and the total Insurance Expense for the year will be $1000.

This is an example of an adjusting entry because it is made at the end of an accounting period to reflect the actual expense incurred during that period.

Question

An adjusting entry in accounting is a journal entry made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Here is an example of an adjusting entry:

Suppose a company has a $1000 insurance expense that is paid at the beginning of the year. This is initially recorded as a prepaid expense. However, as the year progresses, this prepaid expense becomes an actual expense.

At the end of each month, an adjusting entry will be made to record the insurance expense for that month. The journal entry will be:

Debit Insurance Expense $83.33 (1000/12)
Credit Prepaid Insurance $83.33

This adjusting entry reduces the balance in the Prepaid Insurance account and increases the balance in the Insurance Expense account. This process is repeated each month until the end of the year, when the balance in the Prepaid Insurance account will be $0 and the total Insurance Expense for the year will be $1000.

This is an example of an adjusting entry because it is made at the end of an accounting period to reflect the actual expense incurred during that period.

Knowee AI · Accepted Answer

An adjusting entry in accounting is a journal entry made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Here is an example of an adjusting entry:

Suppose a company has a $1000 insurance expense that is paid at the beginning of the year. This is initially recorded as a prepaid expense. However, as the year progresses, this prepaid expense becomes an actual expense.

At the end of each month, an adjusting entry will be made to record the insurance expense for that month. The journal entry will be:

Debit Insurance Expense $83.33 (1000/12)
Credit Prepaid Insurance $83.33

This adjusting entry reduces the balance in the Prepaid Insurance account and increases the balance in the Insurance Expense account. This process is repeated each month until the end of the year, when the balance in the Prepaid Insurance account will be $0 and the total Insurance Expense for the year will be $1000.

This is an example of an adjusting entry because it is made at the end of an accounting period to reflect the actual expense incurred during that period.

14. Which of the following is an example of an adjusting entry?

Question

Solution

Similar Questions

Upgrade your grade with Knowee