Section outline

  • Lesson Objectives:

    1.      Explain the purpose and necessity of adjusting entries.

    2.      List examples of several typical accounts that require adjusting entries.

    3.      Define an “accrued expense.”

    4.      Provide examples of adjusting entries for various accrued expenses.

    5.      Describe the reason that accrued expenses often require adjusting entries but not in every situation.

    Lesson  Contents

    Timing Issues: Selecting an Accounting time period, Fiscal and Calendar Year, Accrual and Cash basis of accounting, Recognition of Revenues and Expenses, Adjusting entries for Prepayments, Adjusting entries for Accruals, Preparing the adjusted trial balance. At the time identifying which types of assumption and principles match with them.

    Lesson Outcome

    1.Able to explain the accrual basis and cash basis of accounting.

    2. Able to explain why adjusting entries are needed.

    3. Able to identify the major types of adjusting entries.