Goal and Purpose
The full Accounting Cycle (AC) includes a total of ten steps which is discussed and illustrated among three chapters. Step 6 of the AC is to record and post adjusting journal entries (AJE) (Similar to Step 1 and 2 but combined in 1 step) and is one of the major topic discussed in Chapter 3. For clarity reasons, step 6 will be split into 2 discussions, recording AJE (current discussion) and Posting AJE (next discussion).
The purpose of this discussion is to describe what is involve in recording AJE, explore the 5 different types of adjustments (accrued revenues, accrued expenses, unearned revenues, prepaid expenses, and depreciation), compare and contrast JE and AJE, , and exchange observations on what information must be included in AJE when they have been properly prepared.
Initial Post
Content
Post a full paragraph consisting of 3 full sentences describing why the adjusting process is needed, how account and amount for adjusting journal entries (AJE) are determine. Use the following suggestions to guide your post:
Select one type of adjustment you are going to focus your initial post on. Choose from accrued revenues, accrued expenses, unearned revenues, prepaid expenses, and depreciation.
For the adjustment you selected, what account will you debited and what account will you credited and how will the amount debited and credited be determined. Please be as specific as possible as if you were teaching a friend on how to properly complete the step.
Comment on how the UTB (Unadjusted Trial Balance) may be used to determine the account and amount on AJE.
If you understand the step well, please share what helps you or if you have difficulty understanding the step, please share what you used to overcome your initial difficulties. An example of what may help is to read and study the “Summary of Adjusting Process” topic in the book.
Compare and contrast between recording journal entries (JE) versus adjusting journal entries (AJE). For example, both JE and AJE using double-entry accounting system. Each journal entry must have a debit side and credit side and the debit equals credit. In contrast, the cash account may be debited or credited in a JE, but you will never find the cash account being debited or credited in AJE.
I
