acc lesson 3 essay - Accounting Lesson 3 Essay Discuss the adjusting and closing processes Provide at least two examples of adjusting entries How are

acc lesson 3 essay - Accounting Lesson 3 Essay Discuss the...

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Accounting Lesson 3 Essay Discuss the adjusting and closing processes. Provide at least two examples of adjusting entries. How are the revenue recognition and matching principles involved? Describe the differences between the unadjusted, adjusted, and post-closing trial balances. Adjusting entries are journal entries made at the end of an accounting period, and are used to measure the period’s income and bring the related assets and liability accounts to correct balances before financial statements are prepared. Before businesses can prepare financial statements, the accountant will have to prepare the adjusting entries. Adjustments are needed for accruals when revenues are earned, or expenses are incurred before the cash is exchanged. Since the cash has not been exchanged, it is possible that the expense has not been recorded, so adjusting the entry is needed to record the revenue or expense. Two types of adjustments are made for accruals, accuse unrecorded revenues, and accuse unrecorded revenues. Two types of adjustments are made for deferrals, divide unearned revenues between periods or divide prepaid expenses.

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