LESSON 8-1 Recording Adjusting Entries

TERMS Accounting Cycle: the series of accounting activities included in recording financial information for a fiscal period Adjustments: changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period Adjusting entries: journal entries recorded to update general ledger accounts at the end of a fiscal period

What is the value of the Supplies Account at the end of the fiscal period? $200 What is your General Ledger Account Balance? $700 How do you get the Ledger to reflect the new balance?

RECORD ADJUSTING ENTRIES Two Steps: Record Adjusting Entries in a Journal Post in the General ledger To Record Supplies adjustment: What two accounts impacted and how? To record Prepaid insurance: What two accounts impacted and how? Supplies Supplies Expense Prepaid Insurance Insurance Expense

Record Adjustments in the Journal Begin on Next journal page after last entries for the month (pg 8) First line - center title of section “Adjusting Entries” Next line – record entry enter year, date, and account title (debit first) No source document - enter Check mark in “Doc. No.” Journal General Sales Credit Cash DateAccount Title Doc No. Post. Ref DebitCreditDebitCredit STEP ONE Page

STEP TWO Post in the General Ledger Account: Supplies Account No. 160 DateItem Post Ref DebitCredit Balance DebitCredit Nov 1 G Nov 8 G Account: Supplies Expense Account No. 570 DateItem Post Ref DebitCredit Balance DebitCredit Account: Prepaid Insurance Account No. 180 DateItem Post Ref DebitCredit Balance DebitCredit Nov 4 G Account: Insurance Expense Account No. 520 DateItem Post Ref DebitCredit Balance DebitCredit Does your Ledger match the Fiscal Period Balances?

TERM REVIEW adjusting entries page 205

ASSIGNMENT WTG 8-1 OYO 8-1 Closing Entries