Year End Adjustments Flashcards
What are the year end adjustments
Depreciation, income adjustment and expense adjustment
What date do you put in general journal for year end adjustments
The last day of the financial period
Accrued income and deferred income
What Is accrues income
Income not yet received
How is accrued income recorded in general journal
Debit accrued income (Asset)
Credit (other account eg rent income) (Owners equity)
Where is accrued income placed in the trial balance
Under the balance sheet / statement of financial position section
What is the accounting equation for accrued income
Debit accrued income +A
Credit other account (eg rent income) +O
What is deferred income
Income received in advance
How is deferred income recorded in the general journal
Debit other account (eg rent income) (owners equity)
Credit deferred income (liability)
What is the accounting equation for deferred income
Debit other account (eg rent income) -O
Credit deferred income +L
What are the expense adjustments
Prepaid expense and accrued expense
What is prepaid expense
An expense paid in advance
What is the general journal entry for prepaid expense
Debit prepaid expense (asset)
Credit other account eg insurance (owners equity)
What is the accounting equation for prepaid expense
Debit prepaid expense +A
Credit other account (eg insurance) +O
What is accrued expense
Expenses the business still needs to pay
