Introduction
You are now one-half way through the eight steps of an accounting cycle. The previous unit discussed the first three steps. The last two lessons covered the fourth step Preparing a Trial Balance and finding errors.
Now we will learn about the fifth step Adjusting Entries. Before financial statements are prepared (sixth step), additional journal entries called adjusting entries are made to ensure that the company’s financial records are up to date.
Following successful completion of this lesson, students will be able to...
- Analyze the accounting equation for the purpose of relating it to the accounting cycle.
Essential Questions
- What are adjusting entries and why are they necessary?
Enduring Understandings
- Adjusting entries are necessary to ensure that the company’s financial records are up to date.
The above objectives correspond with the Alabama Course of Study: Accounting standards: 5.