[Lizl]

I need to know what an adjusting entry, closing entry, and a post-closing trial balance look like. I will give you the figures of you need them.

[terplike]

An adjusting entry is simply an adjustment to a specific account(s) balance due to errors, missed postings, etc. Closing entries are reversing entries made to the final balances in the income and expense accounts and posting the profit or loss to retained earnings. The post closing trial balance is a list of balance sheet accounts (assets, liabilities, and capital) that should balance once adjusting entries and closing entries are made. (e.g. assets = liabilities + capital) If you want to give specific examples I will be glad to try and help.

[morgaine300]

An adjusting entry is simply an adjustment to a specific account(s) balance due to errors, missed postings, etc.

Not true. Those are correcting entries, not adjusting entries.

Lizl, here's another post I made that has some general information about adjusting entries, i.e. some basics of what they are about and why they are made.

https://www.askmehelpdesk.com/financ...ce-192929.html

For a bit more on closing, see this thread:

https://www.askmehelpdesk.com/financ...ts-188059.html

[alisonfrankie]

Here is a site that may help you
netmba.com

on the left hand side there is a space to search netmba for adjusting and closing entries.

Also, a post-closing trial balance is your trial balance after you post your adjusting and closing entries.

Here is a copy of one from my prior homework:

AAA company
Post-Closing Trial Balance
September 30, 199X

Debit Credit
Account:
Cash 29,343
Accounts receivable 4,200
Prepaid rent 2,700
Prepaid insurance 2,200
Photographic supplies 315
Office supplies 125
Land 7,500
Photographic equipment 52,900
Accum depreciation- photo equipment 400
Office equipment 29,000
Accum depreciation- office equipment 250
Vehicle 12,500
Accum depreciation- vehicle 500
Accounts payable 7,930
Note payable 20,000
Salary payable 350
Interest payable 100
Unearned photographic service revenue 5,500
Philip Browning, Capital 105,753
Total 140,783 140,783

[nnennachioke]

An adjusting entry is simply an adjustment to a specific account(s) balance due to errors, missed postings, etc. Closing entries are reversing entries made to the final balances in the income and expense accounts and posting the profit or loss to retained earnings. The post closing trial balance is a list of balance sheet accounts (assets, liabilities, and capital) that should balance once adjusting entries and closing entries are made. (e.g. assets = liabilities + capital) If you want to give specific examples I will be glad to try and help.

Thanks for the explanation. I would appreciate a specific example.

Nnennachioke.

[ilavarasantd]

Adjustment entries to P&L Account and Balance Sheet

[tla]

To make sure that the expenses of an accounting period are matched with the revenues, entries are made at the end of an accounting period to "adjust" the account balances accordingly.
EXAMPLE: The amount of an asset that is used up during the accounting period is transferred to the corresponding expense account.

Prepaid Insurance : You pay for this up front, but you may only use a portion of it during the accounting period for which you are ending so you take the actual amount that was used and place that in your "Insurance expense" account, now your Prepaid insurance account will show a balance of what is left in that account after subtracting the used amount.

I hope this helps

[rubystensrud]

To make sure that the expenses of an accounting period are matched with the revenues, entries are made at the end of an accounting period to "adjust" the account balances accordingly.
EXAMPLE: The amount of an asset that is used up during the accounting period is transferred to the corresponding expense account.

Prepaid Insurance : You pay for this up front, but you may only use a portion of it during the accounting period for which you are ending so you take the actual amount that was used and place that in your "Insurance expense" account, now your Prepaid insurance account will show a balance of what is left in that account after subtracting the used amount.

I hope this helps

Would that be reverse entry?

[morgaine300]

That's an adjusting entry. You're again mixing them up. You're also again digging up old threads.

[dschwartz7]

First things first, in order to understand what adjusting entries are you have to understand something about accrual based accounting. Accrual based accounting differs from cash based accounting because it recognizes revenues when they are earned and expenses when they are incurred rather than when cash is collected or paid out. Here are two examples. Accounts Receivables is an example of revenue that's been earned but not collected. Utilities Payable is an example of an expense that was incurred but not yet paid.Now that we know about accrual based accounting we can start to explore adjusting entries.
Let's say you are the bookkeeper for Gulf Coast Printing which began operations in July of this year and you prepare financial statements quarterly. Also let's pretend the owner paid a 6 month lease on a building and the lease is $9.000. This is called a prepaid expense and is used up or expensed on a montlhly basis. During the first three months of operations the business has revenues of $30,000 of which $6,000 is uncollected so our trial balance would look like this.
Debit Credit
Cash $24,000
A/R 6,000
Rent 9,000
Accounts Payable $2,500
Common Stock 11,500
Revenues 30,000
Wage Expense5,000
Total $44,000 $44,000
Remember that three months of rent has been used up. Since this is a sic month lease that means we have to credit or reduce the prepaid rent $1,500 every month or $4,500. Now because that much has been used we have to debit an account called rent expense. An example of the adjusting entry in the General Journal would look like this.
Date Account Title and Explanation Ref Debit Credit
9/30/2010 Rent Expense 529 4,500
Prepaid Rent 130 4,500
To adjust prepaid rent and rent expense accounts.
I'll will give one more example of an adjusting entry before moving on. This one involves a deferred expense. September 30 is on a Thursday. Let's say the pay period ends on a Tuesday but it has not been recorded yet. So adjusting entries have to be made to both Wage Expense and Wages Payable. Again we would have something like this.
Date Account Title and Explanation Ref Debit Credit
9/30/2010 Wages Expense 533 5,000
Wages Payable 205 5,000
To adjust wage expense and wages payable..
From these two examples you can see that adjusting entries are made at the end of the accounting period in order to bring revenues and expenses in line with each other, they are not correcting entries. Correcting entries should be done as soon as the error is made and should not be put off. Here is the adjusted trial balance.
Debit Credit
Cash $24,000
Accounts Receivable 6,000
Prepaid Rent 4,500
Accounts Payable $2,500
Wages Payable 5,000
Common Stock 11,500
Revenues 30,000
Salaries Expense 10,000
Rent Expense 4,500
Total $49,000 $49,000
Now lets talk about closing entries. These are entries that again are made in the General Journal and are used to reset the temporary(income statement accounts to 0).Basically revenues are debited to a temporay account called Income Summary. Expense accounts are credited to the income summary account. The income summary account is debited to Retained Earnings and any capital drawing account is credited to Retained Earnings. Here is an example of closing entries.
Date Account Title and Explanation Ref Debit Credit
30-Sep Revenus 400 30,000
Income Summary 350 30,000
To close revenues to income summary

Income Summary 350 14500
Rent Expense 729 4500
Wages Expense 733 10000
To close expense accounts to income summary

Income Summary 350 15500
Retained Earnings 320 15500
To close income summary to retained earnings
Now all temporary accounts are set to zero and are ready for the next period. Finally a post closing trial balance is just a trial balance with the balance sheets accounts listed.
Debit Credit
Cash $24,000
Accounts Receivable 6,000
Prepaid Rent 4,500
Accounts Payable $2,500
Wages Payable 5,000
Common Stock 11,500
Retained Earnings 15,500

Total $34,500 $34,500
I hope this answers your questions.

[atique2]

depriciation building amounting to 500000 (estimating life 10 years) residual value 10000

[fraternity]

Weh

[pready]

atique2 you need to know what method of depreciation you are using.

If you are using straight line method then use this formula:
(Cost of asset - Salvage Value) / Estimated Useful Life = Depreciation per year.