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    Adjusting Entries Types

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    What are the four different adjusting entries? What accounting assumptions necessitate the use of adjusting entries? What accounts are subject to adjusting journal entries? What are the advantages and disadvantages of using automated accounting systems to do adjusting entries? What are your thoughts on making adjusting entries; are they really needed or is this just extra work by accountants?

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    The four types of adjusting entries are:

    1. Adjustment of prepaid expenses to expense
    2. Adjustment of prepaid revenues to revenues
    3. Accrual of expenses
    4. Accrual of revenues.

    The accounting assumptions which necessitate the use of adjusting entries are:
    1. Matching principle which is an accounting concept that states that revenues ...

    Solution Summary

    This solution of 218 words discusses adjusting entry types, necessity for, affected accounts and automated systems.