Journal of Adjustment

Accrual basis: Revenues and expenses are recognized when the revenue and expense transactions .

Cash basis: Revenues and expenses are recognized when cash is received or spent .

Adjustments should be made at the end of the year due to the following reasons :
1 . There is still a burden to be borne by the next year
2 . Still no income that can not be realized in the
3 . There was still some prepaid expenses next year
4 . Still no depreciation for the next year
5 . There are still remaining unearned revenue next year .


Journal of Adjustment
Journals are to be made at the end of the year ( 31/12/YYYY ) for the following accounts :

Lease that has been in use:
1 . Rent expense                                         $ xxx
                                Prepaid expenses                                    $xxx

Consumables is Used In Period 1 :
2 . Consumables load                                $ xxx
                               Consumables                                         $ xxx

Insurance That Has Used :
3 . Insurance Expense                               $ xxx
                                Insurance                                             $ xxx

Depreciation Expense Used in Period 1
4 . Machine depreciation expense             $ xxx
                                 Machine depreciation accumulated      $ xxx

Accrued salaries :
5 . Salaries expense                                  $ xxx
                                  Salaries debt                                      $ xxx

Revenue that would be received in the future :
6 . Receivable                                         $ xxx
                                  Sales / Revenue                                 $ xxx

Unearned revenue
7 . Revenue received in advance             $ xxx
                                 Rental income                                    $ xxx

Explanation:
Prepaid Expense / Deferred Expense. Items that have been recorded in the assets but has not become a burden in the year , such as ;
- Insurance
- Supplies
- Rent paid in advance

Depreciation. The process of allocating the cost of fixed assets to the years of its use . Why fixed assets ( depreciation ) need adjustment ? Due to the age of 1 year usually exceeds depreciation , the depreciation expense subsequent years must be adjusted .

Accrued Expense. Burden that should be borne this year , but until the end of the year have not been paid , such unpaid wages .

Accrued Revenues. Revenues are not received until the end of the year .

Unearned Service Revenue. Rental income received for the past few years should be adjusted .