Individual Project #2_jer_accounting

Individual Project #2_jer_accounting - recorded Deferrals...

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Individual Project #2 James E. Rose Jr. American Intercontinental University 1
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I am going to mentor you and show you the ropes and angles of being an accounting clerk and to help make this transition for you as easy as possible. First, we’ll start off with why adjusting entries are necessary. Adjusting entries are recorded mostly during finalization phase where closing entries are required. They are known for being needed to account for transactions that span more than a period. Always remember why adjusting entries are important. Now for example, let’s say we pay our rent 2 years in advance, we need to adjust that prepaid rent so that the balance represents what is left, and the amount used is the rent expense. Next I will describe the 4 types of adjusting entries, and provide a manufacturing industry example of each. Accruals represent expenses and revenues that have been earned but
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Unformatted text preview: recorded. Deferrals which were amounts that have now been earned. Now for example Dr. Closing stock, Cr Manufacturing P & L a/c b) Dr Depreciation (Mfg P & L a/c) Cr plant and Machinery c) Dr. Wages (Mfg P & L a/c) Cr Account payable (if paid in arrears) d) Dr Prepaid exps Cr Freight (if paid in advance). Next, I’ll describe how the entries would be recorded in a computerized accounting system, we’ll go into the general journal and enter the transactions and luckily you don’t have to do this by hand due to all the different software out there and QuickBooks is one of the top software to use. The ethical issue is to always make sure you are reducing the prepaid assets (and 2 increasing the expenses). And the other would be to make sure to include all liabilities (and expenses). References: 3...
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Individual Project #2_jer_accounting - recorded Deferrals...

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