For example, entry for some purchases or sales made on the last day of the accounting period is a primary purchase-sales journal and not an adjusting entry. B. a debit to expense and a credit to revenue. In accrual basis accounting, adjusting journal entries are necessary because the exchange of cash does not always occur at the moment you purchase an item, provide services or incur an expense. Recording unpaid salaries. Thus, adjusting entries impact the balance sheet, not just the income statement. Recording the use of office supplies. Examples include utility bills, salaries, and taxes, which are usually charged in a later period after they have been incurred. The first interest payment is to be made on June 30, 2018, and the company is preparing its financial statements for the year ending December 31, 2017. C) Recording the expiration of prepaid insurance. 1) An example of an adjusting entry would NOT include: A) Recording the use of office supplies. An example of adjusting entries Imagine there is a company called XYZ Company that took out a loan from a bank on December 1, 2017. Recording the expiration of prepaid rent. B. Here’s an example of an adjusting entry: In August, you bill a customer $5,000 for services you performed. An example of an adjusting entry would not include: Multiple Choice O Recordi Recording interest earned on bank account balances. They pay you in September. 12. This is the fourth step in the accounting cycle. Recording the expiration of prepaid insurance. Adjusting entries are made at the end of an accounting period to properly account for income and expenses not yet recorded in your general ledger, and should be … In August, you record that money in accounts receivable—as income you’re expecting to receive. C. Recording unpaid salaries. Deferrals. B) Recording unpaid salaries. C. a debit to a liability and a credit to revenue. Adjusting journal entries are completed at the end of an accounting period, and help to give a more accurate picture of a company’s financial status. An adjusting entry always involves either income or expense account. Deferrals There are following types of adjusting entries: Accruals: These include revenues not yet received nor recorded and expenses not yet paid nor recorded. Recording the purchase of office supplies. The accounting process is made up of many key steps, and always includes performing adjusting entries. 2. As shown in the preceding list, adjusting entries are most commonly of three types, which are: Accruals. Top 3 Examples of Adjusting Entries Below are the examples of Adjusting Journal Entries. Types. 5) An adjusting entry should never include: A. a debit to expense and a credit to a liability. An example of an adjusting entry would not include: A. These entries are completed at the end of a period to update balances in specific accounts in the general ledger. 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