THE BASICS OF ADJUSTING ENTRIESIn o

THE BASICS OF ADJUSTING ENTRIES
In order for revenues and expenses to be reported in the correct period, companies make adjusting entries at the end of the accounting period. Adjusting entries ensure that the revenue recognition and expense recognition principles are followed. Adjusting entries make it possible to report correct amounts on the statement of financial position and on the income statement.
The trial balance the first summarization of the transaction data, may not contain up-to-date and complete data. This is true for several reasons;
1. Some events are not recorded daily because it is not efficient to do so. For example, companies do not record the daily use of supplies or the earning of wages by employees.
2. Some costs are not recorded during the accounting period because they expire with the passage of time rather than as a result of daily transactions. Examples are rent, insurance, and charges related to the use of equipment.
3. Some items may be unrecorder. An example is a utility bill that the company will not receive until the next accounting period.

A company must make adjusting entries every time it prepares financial statements. It analyzes each account in the trial balance to determine whether it is complete and up-to-date. For example, the company may need to make inventory counts of supplies. It may also need to prepare supporting schedules of insurance policies, rental agreements, and other contractual commitments . because the adjusting and closing process can be time-consuming, companies often prepare adjusting entries after the statement of financial position date, but date them as of the statement of financial position date.

Types of Adjusting Entries
Adjusting entries are sclassified as either deferrals and accruals. As illustration 3-2 (page 100) show, each of these classes has two subcategories.
Deferrals
1. Prepaid Expenses. Expenses paid in cash and recorded as assets before they are used or consumed
2. Unearned Revenues. Cash received and recorded as liabilities before revenue is earned
Accruals
1. Accrued Revenues. Revenues earned but not yet received in cash or recorded
2. Accrued Expenses. Expenses incurred but not yet paid in cash or recorded.

The following pages explain each type of adjusment and show examples. Each example is based on the october 31 trial balance of Pioneer Advertising Agency Inc., from chapter 2 and reproduced in illustration 3-3
We assume that Pioneer Advertising uses an accounting period of one month, and thus it makes monthly adjusting entries. The entries are dated october 31.

Hasil (Bahasa Indonesia) 1:

DASAR-DASAR MENYESUAIKAN ENTRIDalam rangka untuk pendapatan dan pengeluaran harus dilaporkan dalam waktu yang tepat, perusahaan membuat penyesuaian entri pada akhir periode akuntansi. Entri penyesuaian memastikan bahwa pendapatan pengakuan dan biaya pengakuan prinsip diikuti. Menyesuaikan entri membuatnya mungkin untuk melaporkan jumlah yang benar pada pernyataan posisi keuangan dan laporan laba rugi. Keseimbangan sidang summarization pertama data transaksi, mungkin tidak berisi data terkini dan lengkap. Hal ini berlaku untuk beberapa alasan;1. beberapa peristiwa yang tidak direkam sehari-hari karena tidak efisien untuk melakukannya. Sebagai contoh, perusahaan tidak mencatat penggunaan sehari-hari persediaan atau mendapatkan upah oleh karyawan.2. beberapa biaya tidak dicatat selama periode akuntansi karena mereka berakhir dengan berlalunya waktu, bukan sebagai hasil dari transaksi harian. Contoh yang Disewa, asuransi, dan biaya yang terkait dengan penggunaan peralatan.3. beberapa item mungkin unrecorder. Contohnya adalah sebuah utilitas tagihan bahwa perusahaan tidak akan menerima sampai periode akuntansi berikutnya.A company must make adjusting entries every time it prepares financial statements. It analyzes each account in the trial balance to determine whether it is complete and up-to-date. For example, the company may need to make inventory counts of supplies. It may also need to prepare supporting schedules of insurance policies, rental agreements, and other contractual commitments . because the adjusting and closing process can be time-consuming, companies often prepare adjusting entries after the statement of financial position date, but date them as of the statement of financial position date.Types of Adjusting Entries Adjusting entries are sclassified as either deferrals and accruals. As illustration 3-2 (page 100) show, each of these classes has two subcategories.Deferrals 1. Prepaid Expenses. Expenses paid in cash and recorded as assets before they are used or consumed2. Unearned Revenues. Cash received and recorded as liabilities before revenue is earnedAccruals1. Accrued Revenues. Revenues earned but not yet received in cash or recorded2. Accrued Expenses. Expenses incurred but not yet paid in cash or recorded.The following pages explain each type of adjusment and show examples. Each example is based on the october 31 trial balance of Pioneer Advertising Agency Inc., from chapter 2 and reproduced in illustration 3-3We assume that Pioneer Advertising uses an accounting period of one month, and thus it makes monthly adjusting entries. The entries are dated october 31.