Adjusting Entries Examples

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 March 23rd, 2017 by Team

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