6._Adjusting_Entries_-_pre_class

6._Adjusting_Entries_-_pre_class - 9/27/2011 15.501/15.516...

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9/27/2011 1 15.501/15.516 – Financial Accounting Fall 2011 Session 6 Nemit Shroff MIT Sloan School of Management Recap of last class •T Accounts and journal entries are two ways of representing a business transaction. •Deb owners’ equity •Cred owners’ equity •The ending balances of all T accounts find a place on
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9/27/2011 2 Plan for today • Understand the concepts of adjusting entries and closing entries •Recogn ize the effects of omitting adjusting entries • Prepare adjusting entries and closing entries 3 Adjusting Entries •So far the accounting entries we have learned tend to arise from exchange transactions . •However , a lot of times we also record entries because of periodic adjustments .
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9/27/2011 3 Examples of adjusting entries • Interest Receivable / Interest Payable •r e c o g n i z e interest revenue / interest expense even though there is no cash received / paid • Happens when interest due date differ from fiscal period ending date •Wage s Payable •R e c o g
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This note was uploaded on 10/31/2011 for the course 18 18.445 taught by Professor Liewang during the Spring '11 term at MIT.

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6._Adjusting_Entries_-_pre_class - 9/27/2011 15.501/15.516...

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