Adjustment Entries

Nila RahayuNo. 30

2 types of adjustment entries

Deferred Adjustments Accrued Adjustments

• Deferred of Expenses• Deferred of Income

• Accrued of Expenses• Accrued of Income

Deferred Adjustment

1. Deferred Expense

First recognized as asset :Asset XXX

Cash XXX

Adjusting entryExpense XXX

Asset XXX

First regognized as expense :Expense XXX

Cash XXX

Adjusting entry :Asset XXX

Expense XXX

2. Defferred Income

First recognized as a liabilityCash XXX

Unearned Revenue XXX

Adjusting entry :Unearned Revenue XXX

Revenue XXX

First recognized as a revenueCash XXX

Revenue XXX

Adjusting entry :Revenue XXX

Unearned Revenue XXX

Accrued Adjustments

1. Accrued Expense

Adjusting entry :Expense XXX

Liability XXX

Adjusting entry :Receivable XXX

Income XXX

2. Accrued Income

Addition :

1. Depreciation

Depreciation = Depreciable Cost – Residual ValueEstimated Useful Life

Depreciation Expense XXXAcumulated Depreciation XXX

2. Allowances for Doubtful Debt

Direct Method

Allowances Method

Bad Debt Expense XXXAcc Receivable XXX

Bad Debt Expense XXXAllowance for Doubtful Debt XXX