The balances reported in the trial balance are not final figures, even if the trial balance has equal debits and credits. The balances need to be adjusted and brought to the correct amounts. Preparing adjusting entries is the first process in the summarization stage of the accounting cycle and a significant step closer to the issuance of financial statements. Knowing how to prepare adjusting entries is proof the one’s understanding and advanced knowledge of fundamental accounting principles and nature of transactions.
Amounts in the unadjusted trial balance need to be adjusted because of various reasons, including the effect of accrual basis accounting. Certain items of income or expense may apply to different periods and affecting balances in the company’s statements of financial position, and performance. Errors and omissions also require adjustment of the accounts. Adjustment is required when balances in the financial statements need to be restated to be presented fairly.
About the Course
Take note of the following useful information about the course. The course tools are available in all lessons and will help with note taking and in your interaction with the teacher and the learning community.
Course Objectives
At the end of the course, you shall be able to
- Understand the nature of adjusting entries
- Know the reasons for adjustments
- Understand the relationship between real and nominal accounts
- Prepare adjusting entries
- Apply the T-account technique in preparing adjusting entries
Course Information
Runtime Approximately 30 hours; Access period 180 days from registration date; Learners ABM Senior High school and college accounting students, entrepreneurs, and non-accountant professionals. This is the first foundation course in accountancy. Recommended next course Fundamentals of Accounting Part Two.
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Learning Aids and Group Chat
Notes Section
Notes are effective aids when reviewing course materials. Toggle the notes section near the bottom of the page and take notes without being distracted from the main presentation, which opens in a separate window. If you notify your instructor, you may expect a response which only you can view. View your notes in the history box. You can view, save, print, or download your historical notes.
Floating Note Icon
In a lesson or topic page, a floating icon like the one above provides an alternative way of taking notes, in addition to the notes section near the bottom of the page. Click the icon and a window will pop up where you may enter your notes. The icon can be dragged to another location you find more convenient.
Group Chat
For each lesson or topic, you can chat and exchange comments with your group mates. Comments are moderated. Observe proper decorum and language. Active participation may be scored and included in the grading criteria. Ask your teacher and seek clarification on the details of how online performance is factored into your final grade.
