LESSON 8-1 Recording Adjusting Entries
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 TERMS
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?
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? RECORD ADJUSTING ENTRIES Supplies Supplies Expense 500 500 Prepaid Insurance Insurance Expense 150 150
STEP ONE • 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.” Page
Post in the General Ledger STEP TWO Does your Ledger match the Fiscal Period Balances?
TERM REVIEW page 205 • adjusting entries
WTG 8-1 OYO 8-1 ASSIGNMENT Closing Entries