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 July 16th, 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 in 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 BSc from Loughborough University.

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