1. Adjusting Entries
A Puzzling Concept
Content by Dr. Kathleen Irwin; Media by PresenterMedia

2. What are Adjusting Entries??
Deferrals and Accruals
• To begin unlocking this
puzzle, let us introduce the
two types of adjustments
you might have to make
at the end of the business
cycle or period.
• Deferrals: when you prepay for
something, or if you accept
payment for services or
merchandise prior to earning
it.
• Accruals: revenues earned or
expenses paid that need to
be put on the books before
closing.

3. Putting it together
• Deferrals Include:
• Prepaid Expenses: Example
• Unearned Revenues: Example
• Accruals Include
• Accrued Revenues: Example
• Accrued Expenses: Example

4. For more on Adjusting Entries, be sure to go through all the material in your Lesson
and watch the homework assignment Video provided under Lesson 4.