PRACTICE TOPIC
Adjusting Entries
Practice Adjusting Entries with 18 accounting challenges on Accountely — instant IAS/IFRS-compliant scored feedback on every submission.
What adjusting entries covers
Adjusting entries are made at the end of a period to bring accounts onto the accrual basis before the statements are prepared. They fall into a small number of recurring types: accrued revenues, accrued expenses, prepaid expenses, unearned revenue, and non-cash items such as depreciation and bad debt estimates. Every adjusting entry touches at least one income statement account and one balance sheet account.
These challenges give you the trial balance and supporting information, and ask for the adjustments and their effect on profit.
Where marks are usually lost
- Writing an adjusting entry that debits and credits two balance sheet accounts — it should always cross the statements.
- Adjusting for the whole amount rather than the portion that relates to the period.
- Including cash in an adjusting entry; cash movements are recorded when they happen, not at period end.
Further readingThe 5 types of adjusting entry
18 Adjusting Entries practice challenges
TitleTypeDifficulty
Bluewater Ferries — Recording Depreciation for the First Year JournaleasyWexford Consulting - Adjusted Trial Balance (IFRS) Trial BalanceeasyMarleigh Studios - Prepaid Expenses and Unearned Revenue (IFRS) JournalmediumWillowmere Clinic - Year-End Adjusting Entries (IFRS) JournalmediumThornbury Ltd. - Adjusting Entries When Books Have Been Closed JournalhardBradford Supply Co. - Aging of Receivables: Adjustment, Write-off and Recovery JournalmediumRiverton Supplies - Accounting for Bad Debts: Write-offs, Recovery and the Year-end Adjustment Multi-StatementmediumCase Study: Brightford Stationers - One Month Through the Complete Accounting Cycle Multi-StatementhardSterling Consulting - Adjusting Entries and the Adjusted Trial Balance Multi-StatementmediumThornbury Ltd - Adjusting Entries When Books Have Not Been Closed JournalmediumRiverton Consulting Group — Trial Balance with Prepayments & Accruals Trial BalancehardLakeshore Services - Revenue Recognition: Advances, Contract Progress and Year-end Adjustments Multi-StatementmediumHarvest Lane Foods - LCNRV by Item: Write-down and Reversal (IAS 2) JournalmediumRosewood Capital - Trading Investments: Purchases, Disposal and Fair Value Adjustment Multi-StatementhardGlenmore Stores - Inventory at the Lower of Cost and Net Realizable Value JournalmediumIronwood Supply - Note Payable with Accrued Interest (US GAAP) US GAAPJournalmediumNorthgate Supplies Ltd - Year-End Close: Adjustments, Adjusted Trial Balance and All Three Statements Multi-StatementhardHarborline Supply - Note Receivable with Accrued Interest (US GAAP) US GAAPJournalmedium