ACCOUNTING CHAPTER 3:

adjustment process at the end of the accounting period order

1. Determine the accounts requiring adjustment, using the unadjusted trial balance. 2. Record the adjusting entries to the the journal 3. Post to the general ledger 4. Balance the Debits and Credits and Adjust the adjusted trial balance

post-closing trial balance

A list of permanent accounts and their balances after a company has journalized and posted closing entries.

A trial balance can best be explained as a list of:

All accounts and their balances at a particular date.

adjusting entries

Always involve at least one income statement account and one balance sheet account.

A company's cash balance is reported in which two financial statements

Balance sheet and statement of cash flows.

adjusting entries for prepaid expenses

CREDIT what you HAVE ALREADY paid

When a company records an adjusting entry for services previously recorded as Deferred Revenue, it records which two of the following?

Debit to deferred revenue and credit to revenue

If an adjusting entry's credit is to a liability account, then the debit must be to a(n)

Expense

A company's Net Income shows up in these 2 statements

Income Statement and Statement of Stockholder's Equity

How do adjusting entries for accrued expenses affect liabilities and expenses?

It increases both

closing entries

The entries that transfer the balances of all temporary accounts to retained earnings are referred to as

Post-Closing Entries

a trial balance prepared after the closing entries are posted

Adjusting entries ensure that ______ balances are reported at amounts representing the economic benefits that remain at the end of the period.

asset

The post-closing trial balance checks that

debits=credits

Adjusting

entries update balances for the recognition of revenue and expenses.

Deferred revenue is a

liability

After the adjusting entries have been completed, the balance in the "Salaries Expense" account represents:

total salaries, paid and unpaid, that have been incurred during the accounting period

Accruals

when the cash flow occurs after either the expense is incurred or the revenue is earned Occurs when cash HASNT been received yet