The adjusting entries examples below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting of adjusting entries.
In each case the adjusting entries examples show the debit and credit account together with a brief narrative. For a fuller explanation of adjusting journal entries, view our adjusting entries tutorial.
Typical Adjusting Entries Examples
Ending Inventory
Account
Debit
Credit
Inventory
XXX
Cost of sales
XXX
Accrued expenses (incurred but not paid)
Account
Debit
Credit
Expense
XXX
Accrued expenses
XXX
Prepaid expenses (paid in advance). Originally posted to prepaid expense account now partially recognized in this accounting period.
Account
Debit
Credit
Expense
XXX
Prepaid expenses
XXX
Accrued income (earned but not received)
Account
Debit
Credit
Accrued income
XXX
Income
XXX
Income received in advance (received but not earned). Originally posted to income in advance account now partially recognized in this accounting period.
Account
Debit
Credit
Income in advance
XXX
Income
XXX
Depreciation
Account
Debit
Credit
Depreciation expense
XXX
Accumulated depreciation
XXX
Bad debt
Account
Debit
Credit
Bad debt expense
XXX
Accounts receivable
XXX
Allowance for doubtful accounts
Account
Debit
Credit
Bad debt expense
XXX
Allowance for doubtful accounts
XXX
Goods taken by Owner
Account
Debit
Credit
Drawings
XXX
Purchases
XXX
Last modified November 12th, 2019 by Michael Brown
About the Author
Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.
