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 ?
Exercise 4-4 Appendix F contains the Farmers' ledger accounts after posting the adjusting journal entries in Chapter 4.
4-8 * Create ledger accounts for the items in the following adjusting journal entries and post the entries to the ledger accounts.
You can perform year-end adjustments by recording adjusting journal entries (as you learned how to do in Chapter 4) or by adjusting cash-basis financial statements directly without recording journal entries.
As Figure 5-1 illustrates, if you choose not to record adjusting journal entries, you prepare a trial balance called an Unadjusted Trial Balance, which does not display any adjustments.
As Figure 5-1 indicates, you can prepare an accrual-adjusted income statement after recording and posting adjusting journal entries.
In about 11 days, a rough program using an electronic spreadsheet was developed to allow the accountants to enter unadjusted trial balances and the adjusting journal entries.
Unadjusted Trial Balance: Trial balance without the accounts used in adjusting journal entries.
It prepared adjusting journal entries, tax-basis compilation financial statements and tax returns for Conour's business.
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.