Example Income Statement Account Balance Sheet Account Cash in Entry?

       

       

       
 1.

Review the three adjusting entries that follow. Using the table provided, for each entry write down the
income statement account and balance sheet account used in the adjusting entry in the appropriate
column. Then in the last column answer yes or no.

2. Adjusting Entries Take Two

Did we continue to follow the rules of adjusting entries in these two examples? Explain.

3. Answer the following questions:

Describe the revenue recognition principle. Give specifics.

Describe the expense recognition principle (matching principle). Give specifics.

What parts of the accounting cycle require analytical processes, rather than methodical
processes? Explain.

Why is the adjusting process needed?

Name two types of adjusting journal entries that are commonly made before preparing financial
statements? Explain, with examples.
Are there any accounts that would never have an adjusting entry? Explain.
Why do adjusting entries always include both balance sheet and income statement accounts?
Why are adjusting journal entries needed?