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    Adjusting Entries and Routine Entries

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    How do adjusting entries differ from routine entries?

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    Adjusting Entries are made for prepaid or outstanding transactions. This is prepared by using the trial balance and other relevant information. This may mean that an account such as Supplies, prepaid insurance etc. may need to be adjusted. These are made for fair disclosure of the transactions. The categories are

    1. Items of multi period in nature:
    For example some revenue and expense items may relate to more than one accounting period like unearned revenues.

    2. ACCRUED ITEMS: Some revenue and expense items have been earned or incurred in a given period, but not yet ...

    Solution Summary

    The response discusses adjusting entries differ from routine entries.