Adjusting entries are made to update the accounts in an accounting system. They are important to get the accounts to their correct balances at the end of the accounting period.
This chapter will teach you everything about adjusting entries.
Adjusting entries are prepared at the end of the accounting period for: accrual of income, accrual of expenses, deferrals, prepayments, depreciation, and allowances.
In this chapter, you will learn the different types of adjusting entries and how to prepare them. You will also learn the second trial balance prepared in the accounting cycle – the adjusted trial balance.
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