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 |
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.
