Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Summary of Adjusting Entries

Financial Accounting

3. Accrual Accounting Concepts

Summary of Adjusting Entries

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Multiple Choice

When preparing a work sheet, how can multiple adjustments be added to a single account?

By creating a new account for each adjustment.

By recording only the largest adjustment and ignoring the others.

By listing all adjustments in the Income Statement columns only.

By entering each adjustment separately in the Adjustments columns and combining their effects in the account's adjusted balance.

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Verified step by step guidance

Understand the purpose of adjustments in a work sheet: Adjustments are made to ensure that the financial statements reflect accurate and up-to-date information, such as correcting errors or accounting for accruals and deferrals.

Identify the Adjustments columns in the work sheet: These columns are specifically designated for recording adjustments to accounts before calculating the adjusted balances.

Enter each adjustment separately in the Adjustments columns: For a single account, record each adjustment as a separate entry in the appropriate debit or credit column, depending on the nature of the adjustment.

Combine the effects of all adjustments: After entering all adjustments for the account, calculate the adjusted balance by summing the original balance and the net effect of all adjustments (debits and credits).

Ensure the adjusted balance is carried forward: Transfer the adjusted balance to the appropriate column in the work sheet, such as the Income Statement or Balance Sheet columns, depending on the account type.