The failure to properly record an adjusting entry to accrue a revenue item will result in an: Generally Accepted Accounting Principles. An adjusting entry dated December 31 is prepared in order to get this information onto the December financial statements. Adjusting entries are done to make the accounting records accurately reflect the matching principle – match revenue and expense of the operating period. When this is recorded, an adjusting entry is made to Depreciation Expense and to a contra-asset account normally called Accumulated Depreciation. Finally, if some adjusting entries were entered, it must be reflected on a trial balance. To assist you in understanding adjusting journal entries, double entry, and debits and credits, each example of an adjusting entry will be illustrated with a T-account. This entry is made as follows: Example. See Page 1. The … Course Hero is not sponsored or endorsed by any college or university. a debit to a liability account and a credit to revenue account. Anonymous. c. a debit to a liability account and a credit to revenue account. For the best answers, search on this site https://shorturl.im/KZFG8. Something has already been entered in the accounting records, but the amount needs to be divided up between two or more accounting periods. Adjusting entries are made at the end of an accounting period to properly account for income and expenses not yet recorded in your general ledger, and should … Terms | D. debit to an asset account and a credit to a liability account. Now we can record the entry. The use of adjusting journal entries is a key part of the period closing processing, as noted in the accounting cycle, where a preliminary trial balance is converted into a final trial balance. Even though you’re … Which of the following statements is associated with the accrual basis of accounting? 47. Inventory: C: Cost of goods sold: C: Example. Wiki User Answered . 0 0. Adjusting entries almost always involve a. balance sheet account (Interest Payable, Prepaid Insurance, Accounts Receivable, etc.) This preview shows page 11 - 13 out of 44 pages. Even though the interest payment is to be made on June 30 in the following year, to properly report the company’s financial status, the company must accrue the interest expenseInterest ExpenseInterest expense arises out of a company that finances through de… ( S. O. An adjusting entry should never include a. a debit to an expense account and a credit to a liability account. An adjusting entry should never include? Expert Answer. Answer. View full document. An adjusting entry should never include a. a debit to an expense account and a credit to a liability account. This preview shows page 11 - 13 out of 44 pages. Which of the following is an example of an accrued expense? The first interest payment is to be made on June 30, 2018, and the company is preparing its financial statements for the year ending December 31, 2017. San Francisco State University • ACCOUNTING 301. Adjusting entries for revenue Accout may include a debit to a revenue Accout and credit to a liability. One common adjusting entry made is to record depreciation. © 2003-2020 Chegg Inc. All rights reserved. Previous question Next question. Multiple Choice . For example, an entry to record a purchase on the last day of a period is not an adjusting entry. The common accounts used are: Unearned Revenue, Deferred Income, Advances from Customers, etc. Adjusting entries, also called adjusting journal entries, are journal entries made at the end of a period to correct accounts before the financial statements are prepared. b. a debit to an expense account and a credit to a revenue account. Brazuca, Inc. is a football manufacturer and distributor. If the liability method is used, the entry would be:Take note that the amount has not yet been earned, thus it is proper to record it as a liability. Adjustments are only made if cash has been received or paid during the period. A.a Debit To Liability And A Credit To Revenue B. Under the liability method, a liability account is recorded when the amount is collected. B. a debit to expense and a credit to revenue. An adjusting entry should never include A)a debit to an expense account and a credit to a liability account. It is usually not possible to create financial statements that are fully in compliance with accounting standards without the use of adjusting entries. A business needs to record the true and fair values of its expenses, revenues, assets, and liabilities. B. A trial balance can trace the mathematical inaccuracy of the general ledger. Here is the process we will follow: Draw two T-accounts. Company that took out a loan from a bank on December 1, 2016 will in... 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