Bookkeeping 17. Adjustments

Question 1

1. How is DEPRECIATION entered? Say you have calculated Depreciation for a piece of equipment to be $500 for the period.

Answer 1

1. Dr to DEPRECIATION EXPENSE, $500
2. Cr to ACCUMULATED DEPRECIATION, $500
   AND label it with, say, ( c ), so those amounts can be paired up later.

Question 2

2. As of the last day of the accounting period, several days pay will be due to employees. What are the entries?

Answer 2

1. Dr to SALARIES EXPENSE, $2,600

2. Cr to SALARIES PAYABLE, $2,600

Question 3

3. When all the necessary adjustments have been made in the ADJUSTMENTS columns, the next step is to:

Answer 3

Extend the totals to arrive at the ADJUSTED TRIAL BALANCE in columns 5 and 6.

Question 4

4. If no ADJUSTMENT was necessary for an account, you:

Answer 4

simply bring the amounts from columns 1 and 2 over into columns 5 and 6.

Question 5

5. But, say, there is a Cr in Column 1 and a Dr in column 4, you;

Answer 5

MUST SUBTRACT one from the other and enter the result, whether a Dr or a Cr, in Column 5 or 6, respectively.

Question 6

6. If Column 2 and Column 4 BOTH show CREDITS, then:

Answer 6

these must be ADDED and the SUM carried into Column 6

Question 7

7. If there is a Dr in Column 1 and and ADJUSTMENT Dr in Column 3, then:

Answer 7

these are ADDED and the SUM put into Column 5 (the ADJUSTED debit column).

Question 8

8. To verify that the steps for arriving at the ADJUSTED TRIAL BALANCE have been performed correctly, you

Answer 8

ADD ALL THE COLUMNS. Columns 3 and 4 should be equal and so should columns 5 and 6.