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 ?
4-8 * Create ledger accounts for the items in the following adjusting journal entries and post the entries to the ledger accounts.
If you do not record adjusting journal entries, you should add items to the cash-basis statements to adjust them to accrual numbers.
Unadjusted Trial Balance: Trial balance without the accounts used in adjusting journal entries.
We also request copies of prior-year financial statements and all adjusting journal entries so we can assess its internal accounting capabilities," he says.
Suddenly, there were computers, afFordable to most firms, that allowed the accountant to enter a preliminary trial balance and post transactions and adjusting journal entries. From this input, all types of analyses were generated.
It prepared adjusting journal entries, tax-basis compilation financial statements and tax returns for Conour's business.
Before publication, conventional guidance was if an accountant handled the input (that is, prepared adjusting journal entries) or the output (looked over the financial statements before submitting them to a client), SSARS no.
Software highlights: Menu-driven; on-screen help; continuous calculation update; includes auto trial balances, which allows entries from geenral ledger, makes necessary adjusting journal entries, provides yearend balances and subsequently transfers all the adjusted figures.