Asked by Pallavi Shyam on Jul 03, 2024
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Adjusting entries always fall into one of two categories: adjustments for prepayments or adjustments for unearned revenue.
Adjusting Entries
Journal entries made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.
Prepayments
Payments made in advance for goods or services, which are recorded as assets on the balance sheet until the corresponding goods or services are received.
Unearned Revenue
Money received by an entity for a service or product yet to be delivered or performed.
- Acknowledge the essentiality and categories of adjusting entries in the field of accounting.
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Learning Objectives
- Acknowledge the essentiality and categories of adjusting entries in the field of accounting.
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