Transcript Recording Adjusting and Closing Entries for a Service Business

Recording Adjusting and Closing
Entries for a Service Business
Chapter 8, Section 1
Review Accounting Concepts
CONCEPT: Accounting Period Cycle
CONCEPT: Adequate Disclosure
CONCEPT: Matching Expenses with
Revenue
Adjusting Entries
Planned on worksheet
Must be journalized
Bring asset and expense accounts up-todate.
Always recorded on a NEW journal page.
Heading “Adjusting Entries” is written to
explain why there are no source document
numbers.
Adjusting Entry for Supplies
1
3
2
4
1. Write the heading.
2. Write the date.
3. Write the title of
the account
debited. Record
the debit amount.
4. Write the title of
the account
credited. Record
the credit amount.
Adjusting Entry for Prepaid Insurance
1. Write the date.
2. Write the title of
the account
debited. Record
the debit amount.
3. Write the title of
the account
credited. Record
the credit amount.
1
2
3
Audit Your Understanding
Why are adjusting entries journalized?
Where is the information obtained to
journalize adjusting entries?
What accounts are increased from zero
balances after adjusting entries for
supplies and prepaid insurance are
journalized and posted?
Problems
Work Together 8-1
Textbook pg. 205
On Your Own 8-1
Textbook pg. 205
Application 8-1
Textbook pg. 221