Adjusting Entry

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Adjusting Entry

 

(Russian, storno, from Italian storno, bookkeeping transfer), a bookkeeping procedure generally intended to rectify an incorrect entry.

Only one kind of adjusting entry is customarily used—the reversing entry, a supplementary entry in which the same absolute number is kept but the sign is reversed, in order to correct an error. The incorrect entry is thus canceled. The numbers reversed are usually written in red ink so that they will stand out; thus, reversing entries are sometimes known as red-ink entries. A partial adjusting entry can also be used; here, the original error is not canceled but merely altered.

In making an adjusting entry, it is necessary that reference be made to the entries being corrected or adjusted.

References in periodicals archive ?
The requirements to prepare adjusting journal entries and determine the effect on income were designed to improve the students critical thinking skills and to reinforce the necessity of being aware of how proposed journal entries effect income per the books.
Adjusting journal entries are entered as single-entry transactions.
Certain of the direct loans were recorded through year-end adjusting journal entries as shareholder loans.
Valdes & Associates (CJVA) presented to PAIM management the preliminary financial statements with proposed adjusting journal entries and management letter.
10, Performance of Review Engagements, concerning fraud and a representation addressing the client's acceptance of any proposed adjusting journal entries.