Unit 2 IP ACCT205

Unit 2 IP ACCT205 - Adjusting Entries ACCT205 Unit 2 IP...

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Adjusting Entries ACCT205 Unit 2 IP Cheri Bolin June 21, 2011 Abstract Accounting can be a hard concept to grasp, if you do not understand the basics of accounting. An organization must learn to distinguish the difference between credits and debits as well as income statements and balance sheets. This essay will explain in better terms what is expected within a company to maintain an accounting system properly.
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Adjusting Entries Adjusting entries were created so that the financial statements imitate the accrual basis of accounting. The accrual basis of accounting entails revenues by giving details within an income statement thus recording expenses within an income statement once it mirrors revenues. Adjusting entries are categorized as accruals or deferrals. An accrual adjusting entry can entail revenues or expenses. A service company that has recorded the transaction has accrued revenue, by entering an accrual adjusting entry as a debit to accounts receivable and a credit to service revenues. When a company receives a service or good from a merchant, the adjusting entry is an
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This note was uploaded on 12/10/2011 for the course ACCT 205 taught by Professor Shanakoh during the Spring '10 term at AIU Online.

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Unit 2 IP ACCT205 - Adjusting Entries ACCT205 Unit 2 IP...

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