Q1CA - Horngren'S Financial And Managerial Accounting

Question

In 75 words or fewer, explain adjusting journal entries.

Step-by-Step Solution

Answer

Adjustment entry is the medication entry to rectify the errors or unrecorded transactions.

Step 1: Journal Entry

A Journal entry is the first record of the transaction. It is also called the original entry as the transactions are recorded on happening of any financial event.

Step 2: Adjustment Entry

 Adjustment entry is the entry made for rectifying or modifying any error or unrecorded transactions. These entries are made at the end of the period.

Adjustments are made for the use of the fixed asset, account collection, and payment, deferrals or accused payments etc.