Non-transaction changes in assets and liabilities and the offsetting changes in revenue and expense items required to meet the earnings and use criteria established under the accrual basis of accounting.
Entries required at the end of each accounting period to recognize, on an accrual basis, revenues and expenses for the period and to report proper amounts for asset, liability, and owners' equity accounts.
Special accounting entries that must be made when you close the books at the end of an accounting period. Adjusting entries are necessary to update your accounts for items that are not recorded in your daily transactions.
Journal entries usually dated the last day of the accounting period to bring the balance sheet and income statement up to date on an accrual basis (as required by the matching principle and the revenue recognition principle). To learn more, see Explanation of Adjusting Entries. To Top
Adjusting entries are journal entries usually made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred. The revenue recognition principle is the basis of making adjusting entries that pertain to unearned and accrued revenues under accrual accounting system. They are sometimes called Balance Day adjustments because they are made on balance day.